New EV tax credit program going to screw up my ID4 delivery.

[JSH]

Originally Posted by Hersbird

But I can't get a binding contract. They don't even have a VIN number assigned. The contract would be between me and the dealership anyway, not VW. The dealership says they can't by law put me in a contract until they possess the car and the car hasn't even started production yet.

That isn't how vehicle orders work. When I ordered my Frontier I had a binding written contract with the order sheet and final price down to the penny 3 months before the vehicle was built.

Now maybe your dealer doesn't WANT to write you a binding contract to order you a car and want to leave themselves an out to sell it to the highest bidder or change the price on you but they certain can.

[redpoint5]

Originally Posted by Isaac Zachary

I would think a reservation would be considered a contract. But I'm no lawyer.

A contract is a binding contract. Whatever is in the fine print that nobody reads is what carries weight.

I recently read of a family that had a contract to build a new home, and the contractor built it. They had to sell their existing home to cover the expenses in the purchase agreement. Then, the builder put the house on the market at a higher price because the market had appreciated. The contract they signed allowed for the builder to seek market price for property and structures which they purchased and built. Apparently that's somewhat common practice.

I dislike both that people don't read contracts, and that contracts are purposely written to be unreadable. Customers should demand a readable and concise contract. We shouldn't be willing to sign a cell phone contract that says "Verizon has no guarantee of cell phone service, or that you'll ever have service anywhere at any time, but you agree to pay your bill on time, in full, every month". That's a stupid contract, but everyone signed it.

[Hersbird]

I appreciate the help, but the forums are just flooded with stories of many states saying it is flat-out against the law to have such a contract on a car thar hasn't been built. It is possible with the history of car sales many states have passed laws protecting consumers from past bad car dealership practices.

Also the all contracs are "binding" part is kind of hard to sell to the IRS when it says non-binding in the contract. Not on my side, not on their side.

It's too late now Biden signs it today, so it had to happen yesterday.

[Isaac Zachary]

I'm so sorry! Hopefully things will change in the next year or so. Or maybe just keep holding onto that deposit until the time comes and they say "here's a much more expensive EV than what you had asked for" and then complain and ask for your deposit back and then see what they say. Hopefully we'll be in some sort of recession by then and car prices will be down and you'll have more barganing power. Who knows.

[rmay635703]

Anyone figure out what EVs can get the tax credit, last I heard none.

[JSH]

Originally Posted by rmay635703

Anyone figure out what EVs can get the tax credit, last I heard none.

From Automotive News:

Currently eligible vehicles are 2022 model year EV or plug-in hybrid electric versions of the Audi Q5; BMW X5 and 3-Series Plug-in; Ford Mach-E, F-Series, Escape PHEV and Transit Van; Chrysler Pacifica PHEV, Jeep Grand Cherokee PHEV and Wrangler PHEV; Lincoln Aviator PHEV and Corsair Plug-in; Lucid Air; Nissan Leaf; Volvo S60; and Rivian, R1S and R1T.

The 2023 Nissan Leaf, BMW 3-Series and Mercedes EQS are also eligible.

The IRS also clarified that non-refundable deposit of 5% of the purchase price qualifies as a "binding contract".



For 2023 Tesla and GM get credits again so some of their models may qualify.

Sourcing rules kick in for 2023 but companies with North American battery plants should be able to make things work with some adjustments.

Foreign Entity of Concern requirements don't kick in until 2024.

[Hersbird]

That IRS clarification is going to screw a bunch of people who thought they were golden getting a binding contract of $100 additional dollars non refundable in addition to the $500 refundable they already had. I hadn't heard of anyone going with the at least $2500 non refundable it would take to hit 5%

As far as 2023 there are no known cars that will qualify for the whole $7500 credit but some may get 1/2 the credit for now.

The battery content rules do kick in in Jan 2023. They default to the outline unless the secretary gives a different input by Jan 2023. That has been widely mis-reported like 2023 is going to be some kind of free-for-all. There is also no free-for-all adding back Tesla or GM in 2022 without the income caps of 2023. Their credits don't resume until 2023 with income caps and battery sourcing in place.

[JSH]

Originally Posted by Hersbird

As far as 2023 there are no known cars that will qualify for the whole $7500 credit but some may get 1/2 the credit for now.

The battery content rules do kick in in Jan 2023. They default to the outline unless the secretary gives a different input by Jan 2023. That has been widely mis-reported like 2023 is going to be some kind of free-for-all. There is also no free-for-all adding back Tesla or GM in 2022 without the income caps of 2023. Their credits don't resume until 2023 with income caps and battery sourcing in place.

In 2023 the law requires 40 percent of the critical minerals used in EV batteries to be extracted or processed in the U.S. or a country where the U.S. has a free trade agreement in effect or from materials that were recycled in North America

The bold text could be a loophole large enough to drive a Korean made battery celll through.

Materials are a bit fungible. It helps that the USA has a small EV market share vs. Europe and China. If a supplier gets 15% of their lithium from Chile and the rest from another countries they can say the batteries shipped to the USA have the Chilean lithium. Likewise if Bolivian lithium is processed in Korea (or the USA, or Mexico) it is good. Extracted OR processed - no doubt the auto industry worked hard on that language.


Ford and GM are looking pretty good for 2023 with North American plants and Korean battery suppliers.

[Hersbird]

Originally Posted by JSH

In 2023 the law requires 40 percent of the critical minerals used in EV batteries to be extracted or processed in the U.S. or a country where the U.S. has a free trade agreement in effect or from materials that were recycled in North America

The bold text could be a loophole large enough to drive a Korean made battery celll through.

Materials are a bit fungible. It helps that the USA has a small EV market share vs. Europe and China. If a supplier gets 15% of their lithium from Chile and the rest from another countries they can say the batteries shipped to the USA have the Chilean lithium. Likewise if Bolivian lithium is processed in Korea (or the USA, or Mexico) it is good. Extracted OR processed - no doubt the auto industry worked hard on that language.


Ford and GM are looking pretty good for 2023 with North American plants and Korean battery suppliers.

Those are 2 separate rules on the batteries BOTH must apply to get $7500. If one applies then you get $3750, in none apply you get $0 even if the car itself is assembled in North America.

As it stands right now, I don't think any battery is going to qualify for the whole $7500 and it just gets worst going forward from 2023.

Do you really see the EPA authorizing some big Lithium mines here in the US in the style of the Berkley Pit 2.0?

[Hersbird]

Even the congressional budget office is only projecting 11,000 $7500 rebates total in 2023. That's for all BEV and PHEV Fords, Teslas, Chevys, Chrysler, Toyotas, etc. Sold in 2023.

They know very few will be eligible.