New Pacifica plug in hybrid for $22,265 after federal tax credit.

[Hersbird]

Originally Posted by JSH

That isn’t how Roth conversions work. If you are in a 20% tax bracket you would need to convert $25,000 from a traditional IRA to a Roth IRA to pay an additional $5000 in federal taxes and max out the EV tax credit.

If you contributed $5000 to a Roth IRA instead of a Traditional you would only pay $1000 extra in taxes

If you take $5000 cash at put it in a Roth IRA there would be no effect on your taxes

*only examples, most households aren’t in that high of a federal tax bracket so you need to do the math based on your situation.

IF I was allowed to convert my traditional to a Roth (which I cannot in the federal system) I would probably do even more than $25,000. I see what you mean about not paying more taxes by adding other money to a Roth IRA. Maybe next year I'll switch the contributions over from standard to Roth as doing it this late this year wouldn't amount to much.
Doesn't the way this tax credit works just piss you off? If anything a blue collar middle class working family buying a fuel efficient minivan for everyday personal use should be the very group and type of vehicle a tax incentive is targeted at. Instead millionaires buying their probably 4th car or companies like Google getting 500 million of the money. So glad the money I do pay in taxes gets to help them out.

[redpoint5]

Yep, that's the criticism I've been making all along. This is a subsidy to help the wealthy purchase a new vehicle. The very definition of regressive.

Every manufacturer could potentially reduce the federal tax revenue by $1.5 billion assuming all 200k vehicles claim the full credit amount, and there's many manufacturers, most of them foreign and benefiting from this US funded subsidy. That doesn't account for the "unlimited" sales window that can last up to 6 months, or the following unlimited sales that are permitted during the phase out period.

The government has no business deciding which technologies and industries to "win" because that also puts other competing technologies at a competitive disadvantage. Who is to say that battery EV (BEV) is clearly the best way to reduce fuel consumption?

Any policy needs to directly address a stated problem, with very clear objectives, and be shown that the net benefit outweighs the net cost. If reducing CO2 emissions is the assumed goal of the tax credit (the goal doesn't seem to be stated anywhere that I can find), it would be way more effective to simply raise taxes on fossil fuels. Government should address problems at the highest level possible to avoid interfering with the free market, which is the most efficient way problems are solved.

[samwichse]

I always thought this would have been better structured as "the first manufacturer to hit whatever unit limit, the subsidies go down for everyone," and then again, and again.

The way it's laid out now, the manufacturers that drug their feet with compliance cars will be rewarded by jumping in later when making EVs is cheaper and still get all the subsidies the first movers got. The other way, if the manufacturers wanted to sell the largest number of subsidized vehicles they could, they would have had to jump in as early as possible.

[Hersbird]

Originally Posted by samwichse

I always thought this would have been better structured as "the first manufacturer to hit whatever unit limit, the subsidies go down for everyone," and then again, and again.

The way it's laid out now, the manufacturers that drug their feet with compliance cars will be rewarded by jumping in later when making EVs is cheaper and still get all the subsidies the first movers got. The other way, if the manufacturers wanted to sell the largest number of subsidized vehicles they could, they would have had to jump in as early as possible.

This is also ironically the way mining and drilling for fossil fuels works. Oil left in the ground becomes more and more valuable as time goes on. If there is a such thing as peak oil OPEC is killing themselves actually producing while the US and Canada just sit on huge reserves that electric cars or not will be tapped at some point.

[redpoint5]

EVs shouldn't be subsidized to begin with. It's a dumb idea. So dumb that if someone were to propose it as a new idea, the immediate reaction should be laughter.

That said, the least dumb way to implement the subsidy is to set a total limit of credits that all manufacturers share, and make the subsidy available at point of sale so lower income people can take advantage of it. This gives motivation for manufacturers to develop EVs immediately and in larger quantities.

Originally Posted by Hersbird

This is also ironically the way mining and drilling for fossil fuels works. Oil left in the ground becomes more and more valuable as time goes on. If there is a such thing as peak oil OPEC is killing themselves actually producing while the US and Canada just sit on huge reserves that electric cars or not will be tapped at some point.

I tend to believe you're right about fossil fuels increasing in value over time as supply of easily accessible oil dwindles. That said, there's always the risk of demand falling off causing prices to plummet. For instance, if a breakthrough in fusion energy were to happen that made electricity so cheap that fossil fuels couldn't compete, then demand would substantially drop.

[Hersbird]

In a way energy is a byproduct of petroleum refining. If you replaced the energy could you also replace the plastics, the rubbers, the asphalt, the jet fuel, etc. It's like rasing pigs but only eating the chops. Grandpa said use everything but the squeal. What saved the whales wasn't Greenpeace but Texas crude replacing all the whale oil produts.

[redpoint5]

Right, and "better" alternatives could potentially replace fossil fuels (as fuels). We'd still have need of the many organic compounds, pharmaceuticals, and dense energy applications for things like flying. But if we replaced nearly all fossil fuel consumption in electricity generation and ground transportation, that would drastically reduce demand and drastically increase supply. Only the cheapest/easiest/best sources of fossil fuels would then be profitable in this scenario.

I'm not even saying this is likely, just saying it's possible. My hunch is fossil fuels will trend upward in unit price with demand remaining strong through this century. I'm not confident enough to gamble on it though.

Fusion is just one possibility. There's plenty of others, with just incremental improvements such as 4th gen fission, or improvements in PV or other renewable energy possibly disrupting fossil fuel consumption.

There's an upper limit to price for using fossil fuels as fuels too. If fossil fuels cost more than alternatives, then demand for them will drop. I'm sure there's a graph somewhere showing predicted demand at each price point.

[vskid3]

If you lease, doesn't the lease company get the tax credit and (hopefully) apply that to the cost of the car? I played around with the idea of getting a Bolt when they first came out and leasing seemed to be the better deal because I wouldn't qualify for the whole tax credit but would effectively get it by leasing.

[cowmeat]

I'm not sure about leasing, but when I bought my 2018 Volt I got it with 2400 miles on it at the dealership and it hadn't been titled. The dealer only used Volts as their courtesy cars and after three months or 3,000 miles they took them out of service, took the full 7,500 tax credit on them and put them up for sale. I ended up getting Ruby for over 12K less than the sticker price (along with zero percent financing) and all but 3 months of the full warranty.

I couldn't have afforded the Volt otherwise, and I couldn't have gotten the full 7,500 dollar tax credit if I bought it with zero miles, so it worked out well!

[roosterk0031]

Nissan or Chevy who ever takes the Tax Credit on leasing. Cowmeat got a deal that anyone interested should look for. Looked at (WWW) at 2016 Volt under 30,000 miles for under 15000, but found out it was a Lemon Car, looked too goo to be true and maybe was. But dang I'd like to play with one.