Bacon's Rebellion

Democracy Thrives in Sunlight

Sudden Impact

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by

James A. Bacon
in

The Toyota Prius jump-started the EV era, but the Prius Prime PHEV version no longer qualifies for Federal tax credits because final assembly is not in America.

by Bill Tracy

President Biden’s new Inflation Reduction Act (IRA) might be better called the American Auto Industry Rescue and Restructure bill. The U.S. auto industry wants to phase out gasoline vehicles, and it also urgently needs Congress to endorse and support that goal.

Apparently, the IRA’s eventual passage was no surprise: the handwriting was on the wall. Many southern states — including Virginia’s key competitors of North Carolina, Georgia, Alabama, Mississippi, Tennessee, and Texas — have been busy constructing new electric vehicle (EV) and lithium battery assembly plants. In hindsight, the construction activity was probably anticipated to comply with Congress’s new made-in-America rules.

Those Southern states (sans Virginia) are now dubbed the  “EV Battery Belt.” Why has Virginia not grabbed a bigger slice of this economic pie? Have we been asleep at the wheel? Or did we just let the “Tesla autopilot” take over?

But for now, I would like to focus on the practical aspects of buying a new electric car in Virginia. Many consumers in today’s new car market were blindsided by the sudden impact of the new rules.
Some cars will no longer qualify for the (up to) $7,500 federal tax credit. This includes popular plug-ins such as the Toyota Prius Prime and RAV4 Prime, the Hyundai IONIQ and Kona, and the Kia Niro. The IRS “transition rule” will disallow the tax credit for non-USA plug-ins except for those in binding contracts as of 16-August-2022, the day that President Biden signed the new Bill into law.

In all, tax credits were abruptly cut off for all but about 16 of the 65 plug-in models on sale in the U.S. market. You might ask, what plug-in vehicles still do qualify for the Federal tax credits?

Enter the Department of Energy, which has provided a list of Model Year 2022 and early Model Year 2023 electric vehicles that tentatively meet Congress’s new requirement of final assembly in America.

The “good” news is, starting in 2023, several popular Tesla and General Motors EV models will once again qualify for substantial subsidies, subject to some limitations. The plot thickens in 2024 when the subsidy starts depending on the “USA” (non-China) content of the lithium battery pack.

Also starting in 2023, for the first time, used EVs will qualify for a $4,000 tax credit. But only for buyers in lower income brackets and for cheaper, used EVs costing less than $25,000. Given those limitations, the used car EV rule is not currently expected to significantly impact sales.

I will  continue to follow this issue. Meanwhile if you are considering a plug-in purchase, and if you have a question, I will respond in the comments.

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42 responses to “Sudden Impact”

  1. f/k/a_tmtfairfax Avatar
    f/k/a_tmtfairfax

    The Party of Choice doesn’t want consumers to have the ability to make a free choice about purchasing electric vehicles. If we want more electric vehicles and if the government is going to give a tax credit, it should apply across the board.

    1. energyNOW_Fan Avatar
      energyNOW_Fan

      Correct.

      Our “enemies” are supposed to be Russia and China. We do not import cars from Russia and China (but lots of lithium, rare earths, etc). Japan is a good ally and is making a lot of hybrids with less metals and less lithium. Liberals feel the quality of you as an American relates to how many tons of lithium is in your car, and US Autos do not want to compete with Japan if they can get away from it.

    2. Stephen Haner Avatar
      Stephen Haner

      The powerful Law of Unintended Consequences is going to kick in big time on several aspects of the Inflation Reignition Act. Moving all the production onshore, if we can, and doing it with all the labor mandates and domestic content mandates — does any fool think that LOWERS the ultimate costs? Why did it move offshore to begin with? That’s how we build aircraft carriers so cheaply…uh, not.

      As to “free choice”, that problem is solved by government mandates to prevent the construction or sale of any new gas or diesel vehicles. That choice start to disappear soon. Carrot and stick.

      1. James Kiser Avatar
        James Kiser

        Which CA is doing 2035 is the start of no carbon fueled vehicles.

    3. energyNOW_Fan Avatar
      energyNOW_Fan

      Correct.

      Our “enemies” are supposed to be Russia and China. We do not import cars from Russia and China (but lots of lithium, rare earths, etc). Japan is a good ally and is making a lot of hybrids with less metals and less lithium.

      But U.S. Liberals feel the quality of you as an American relates to how many tons of lithium is in your car, and US Autos do not want to compete with Japan if they can get away from it.

      There is a difference between self-sufficiency and protectionism. This bill is oodles of protectionism and favoritism to U.S. autos.

      But from Virginia’s perspective, it you can’t beat ’em, join ’em.

  2. James Kiser Avatar
    James Kiser

    Interesting that 1. auto makers raised their prices to match the tax credit (a subsidy to the rich) 2. not a single so called ev vehicle ad will give you a range. I have had to rely on people who have test driven the Ford raptor and found it badly wanting with a range of only 150miles round trip and if you are hauling a trailer under 5,000 lbs. your range drop is 100mile round trip with a 45 minute charge time of only 80% do the math. Biden’s and the eco freak lobbies claim that you will be able to drive across America in an EV is true if you have 3 months.

    1. energyNOW_Fan Avatar
      energyNOW_Fan

      And in summer do not use A/C and in winter go slow on heat, if you want get the “advertised” efficiency.

      1. Matt Adams Avatar
        Matt Adams

        Not to mention the the weather (hot/cold) impacting the range as well.

      2. WayneS Avatar
        WayneS

        Exactly. The advertised range for these vehicles should include carrying luggage, operating the stereo, charging cell phones, running heart(or AC) and all the other stuff people do when travelling in their cars.

        Providing the maximum range the vehicle can travel on perfectly flat ground, in perfect atmospheric conditions with a light tail-wind, windows all rolled up, zero added electric load, and one 125 lb person in the car tells me nothing bout how it will behave in real life.

        1. Nancy Naive Avatar
          Nancy Naive

          Just replace the sunroof with a solar panel and for 12 hours you can charge all small appliances.

    2. Matt Adams Avatar
      Matt Adams

      I guess people should start requesting more vacation time, they’ll need an extra 3 days on either end to charge their vehicle to get there.

      1. James Kiser Avatar
        James Kiser

        LOL

    3. WayneS Avatar
      WayneS

      It will still take a few days less than a wagon train, so it’s got that going for it…

      1. James Kiser Avatar
        James Kiser

        Where’s the Major and Flint?

    4. Merchantseamen Avatar
      Merchantseamen

      You could never drive through the state of WV. Up and down will kill that battery at least once if not twice during the drive. It took 40 years and a war to build the energy infrastructure we have today. They missed the boat by not pushing for hydrogen. 300 mile range 6 to 8 minute fill up easy to retro fit gas stations, still using “internal combustion engines however n0 pollution. Water vapor is the emissions. Goobermint….someone is getting rich somewhere.

      1. James Kiser Avatar
        James Kiser

        I was all for hydrogen cheap and what waste do you get water vapor. I actually drove a Chevy hydrogen car years ago. It was fantastic , quick and quiet. 8 gals of hydrogen would take you 480 miles according to the manufacturer rep. I asked when they would produce them and he said they couldn’t until someone built a fuel network. WTF! I said have dealerships be the site of your fuel network. The idiots at Chevy could have been way ahead of the game already. Nope had to think about their bonuses. Interesting that Musk did it and Chevy wouldn’t.

        1. Merchantseamen Avatar
          Merchantseamen

          James May had a real interesting you tube video on the Hydrogen vehicle. Honda a stylish car that ran on it. It gave us the freedom we Americans desire when driving. He filmed it in CA. EV’s? I say follow the money. I figure the ignorant’s in goobermint will strike a deal that electric companies can burn fossil fuel to supply electric power. the goobermint will stand to gain all kinds of $$$ though fees and taxes. They will ham fist the oil companies into some kind of compliance. You and me will be left holding the bag as our quality of life slips through our fingers. Also don’t forget there is some 21 trillion dollars in retirement funds, 401K, pensions etc. They want it bad real bad and working overtime on how to seize it. That way they can start the “universal income”… “From each according to his ability, to each according to his needs” is a slogan popularized by Karl Marx in his 1875. They hate us and they want to kill us. They will if given the chance.

  3. James Wyatt Whitehead Avatar
    James Wyatt Whitehead

    EV. I have to laugh. Just started assembling a 1600 single port motor for the Bug. Oil leaking and smog making machine to cancel out a few greenies.
    https://uploads.disquscdn.com/images/82334066cca3ea6556b85ab8ca305821a702be942a4e7ae1762f614cf5050fc2.gif

    1. WayneS Avatar
      WayneS

      That’s a rare engine, isn’t it? I think they only made it for one year – ’70. 71′, something like that.

      1. Nancy Naive Avatar
        Nancy Naive

        It maybe rare, but the #3 cylinder will still run hot and require new rings at 100,000 miles, if you’re lucky.

        1. James Wyatt Whitehead Avatar
          James Wyatt Whitehead

          #3 is a pain. The big pain is the headstud coming out of the block. I have it beat! Deep bored case savers. Single port runs cooler than the dual port.

    2. Nancy Naive Avatar
      Nancy Naive

      Makes an okay X-plane engine, but it’s chances of pushing a 3500 pound super compact car is about nil. Maybe you can find an old Porche 912 chassis or one of the 360 was it?

    3. Nancy Naive Avatar
      Nancy Naive

      Makes an okay X-plane engine, but it’s chances of pushing a 3500 pound super compact car is about nil. Maybe you can find an old Porche 912 chassis or one of the 360 was it?

  4. Ruckweiler Avatar
    Ruckweiler

    This entire electric charade depends upon powerplant electrical generation which lefties hate and attempt to shutdown in their windmill and solar fantasies. Virginia, black and brown-outs will be in the future.

  5. Nancy Naive Avatar
    Nancy Naive

    Lucid Ayre (I think that’s right) just tested out at 505 miles on a charge (they boasted 525, but C&D or whoever only got 505) and assuming you could get, say, another 200 miles from a quick charge while eating dinner, then that’s 15 hours of road time. That pretty much is a death knell for the ICE.

    1. energyNOW_Fan Avatar
      energyNOW_Fan

      Wishful thinking – it should only be the death of ICE/hybrid if the public actually wants to buy the darn EV thing. U.S. liberals however demand that ICE cars be banned and heavily taxed, and EV’s get enormous subsidies. In that case, OK, if ICE is banned by a blue Congress, that is death of ICE.

      Virginia car tax alone on a Lucid Ayre would probably be $50,000. That might balance a few locality budgets, but realistically we would have to suspend car tax on EV’s to sell them here.

  6. energyNOW_Fan Avatar
    energyNOW_Fan

    I suggest Gov Youngkin get on the phone with Toyota and offer to assemble Toyota PHEV’s and EV’s here. Quickly though, because Joe Manchin already has Toyota’s cell phone number.

  7. energyNOW_Fan Avatar
    energyNOW_Fan

    I got a follow-up question from Jim Bacon-

    California just banned gasoline-powered cars by 2035. Virginia’s vehicle emission standards are tied to California’s.

    Does that mean Virginia will ban gasoline cars by 2035?

    1. energyNOW_Fan Avatar
      energyNOW_Fan

      You know FORD is already having layoffs of the people making gasoline cars. The U.S. auto industry seems to see EV’s as the way to get out of their current business model, which currently means lots of union laborers with retirements packages etc. The US auto industry has always been jealous of the oil industry, because the oil industry does not have the huge head-count problem that the auto industry has had to deal with.

      So the U.S. auto companies are saying they want to be “out” of gasoline vehicles and hybrids. They want to downsize and layoff those people. However, that was before Russia and China became such enemies as they are now. So I am not sure the mega-dependence on China, that EV’s imply, is the correct answer.

      Put another way, I do not like EV’s, I like hybrids. But I may not have the choice.

    2. Stephen Haner Avatar
      Stephen Haner

      Yes, Virginia is fully a Section 177 state and will follow CARB decisions unless the law or reg get changed.

    3. Nancy Naive Avatar
      Nancy Naive

      Yep.

  8. f/k/a_tmtfairfax Avatar
    f/k/a_tmtfairfax

    And the electric distribution grid is sufficiently hardened to keep power flowing 24/7 in all locations? As some might recall, I had 8 outages in 18 months in McLean before moving. Can an all-electric economy survive absent burying 100% of the network in all but the most remote areas? What is the cost of that? The FCC, DoC and DolA are spending billions to bring broadband to more and more locations. What is the likely cost of bringing the electric transmission and distribution network in the United States? And who will pay for it? What does that do to the cost of elecxtric vehicles? To the cost of living?

  9. Nancy Naive Avatar
    Nancy Naive

    “In 2021, Governor Northam and the far-left controlled General Assembly signed a law that binds Virginia to California’s emission vehicle regulations, which, among other things, bans the sale of gas-powered cars in Virginia by 2035,” a spokesperson for Virginia Attorney General Jason Miyares’ office said in a statement to Fox 5 DC.

    The spokesperson added, “The Attorney General is hopeful that the General Assembly repeals this law and discontinues any trend that makes Virginia more like California. Unelected California bureaucrats should not be dictating the will of Virginians.”

    Other states like Washington and Massachusetts likewise follow California’s emissions rules.

    1. energyNOW_Fan Avatar
      energyNOW_Fan

      At the moment to my knowledge Virginia is not a CARB state, whereas many RGGI/Northeast states are CARB states. So I am confused about when Virginia must start acting like the other CARB states.

      By the way, I wrote “SUDDEN IMPACT” a week or so back before the new California ICE ban announcement, although I had thought that Ca did that already.

      But as I say in the article, US automakers want to stop making gasoline cars, and they urgently needed a blue Congress (and a blue California decided to help) to give them moral, legal, and financial supports for that policy.

      And it would seem to me, Manchin was willing to give the US automakers what they wanted, as long as he could still make some coal and natural gas. Like most Dems, Machin was ready to throw Big Oil under the bus. WVa is a huge electric power exporter. so EV’s are good for Joe.

      1. Nancy Naive Avatar
        Nancy Naive

        As I always say, “Just because it’s self-serving doesn’t mean it isn’t also the correct thing to do.”

        Steam engines ran their course, too. If I have a choice between an electric motor or a chunk of metal filled with a 1,000 moving pieces, it’s not a tough decision.

        1. energyNOW_Fan Avatar
          energyNOW_Fan

          Electric motors have their advantages.
          But there are several fundamental downsides (re: batteries) to counter-balance the usefulness in cars. Batteries are the issue, not the motor.

          Cost, tons of special metals resources needed for each EV car, weight of car, and needing megatons of electrons to match the energy a gallon of gaso. And cargo space is a victim, unless you make a big EV, which consumes more megatons of electrons.

          Not to mention the gaso engines have proven practical last 100 years. Who cares about 100o moving parts?

          Cost is so high for EV we need to get rid of car dealers, and probably need to get rid of car tax in Virginia, and give people EV subsidies and handouts, and punish the people in ICE cars, all to make EV work.

          1. Nancy Naive Avatar
            Nancy Naive

            Stored energy either way. The question is which of the two have room for advancement? I’d bet batteries have a helluva lot more room to advance in th next 50 years than hydrocarbons. Recycling a battery is bound to be easier than making hydrocarbons.

          2. energyNOW_Fan Avatar
            energyNOW_Fan

            Nope.
            Remember liberals said oil was dead technology…peak oil, no more supply? Enter fracking, to completely blow that claim out of the water.

            What *prob” makes sense is generating power on vehicle per fuel cells.

          3. energyNOW_Fan Avatar
            energyNOW_Fan

            Nope.
            Remember liberals said oil was dead technology…peak oil, no more supply? Enter fracking, to completely blow that claim out of the water.

            What *probably* makes sense is generating power on vehicle per fuel cells. EV is strictly U.S. liberals political demand. U.S. liberals prob just want to act out on their hate of fossil fuels, and stop buying ICE cars…so go ahead buy yourself a Tesla. But then liberals want a huge subsidy to signal to others that their behavior is correct moral position.

  10. Richard Smith Avatar
    Richard Smith

    A lot of jibber jabber by you folks.. Bottom Line.. the who darn thing is UnConstitutional.
    The free market, which is mentioned in the Virginia Republican Creed is the answer. The free market should be deciding electric versus ICE or some other source. Federal government has no business deciding what we should drive or subsidize. Let alone telling us to burn ethanol or subsidize electric cars. And yes I could come up with a looong list of stuff our government says and does that is UnConstitutional…

    1. energyNOW_Fan Avatar
      energyNOW_Fan

      Normally Congress sets the rules for U.S. business, and it is within their power to mandate ethanol and/or EV’s, whether we like it or not (and I do not like it).

      Automobile exhaust however is a trickier subject because Congress, years ago, gave California the right to override Congress to solve their smog problem. California is running down the field with this unilateral control and they demand tailpipe CO2 be halted, which is not the power that Congress intended to give California, But U.S. Democrats agree with California’s rules and will not tolerate anything less stringent. And even if you fix that issue, US auto makers and now Toyota fully endorse California and the major automakers request gasoline vehicles be banned as soon as possible in the USA. They want to join the California wagon and stop making gasoline vehicles. So who are we going a buy a gaso vehicle from?

      Energy policy is different for each country based on internal politics etc. And this is the way USA is headed right now.

      1. Richard Smith Avatar
        Richard Smith

        Rules for businesses and us folk in general are things like punishment for not paying your bills on time.
        Policy things at most are at the State level. Their is not one word in the Constitution about mandating for example the use of ethanol. Congress and the Executive branch have been exceeding their authority easily back to the 30’s.
        I know many people just buy into the idea that government just gets to willy nilly run things, but that’s not what’s in the Constitution..

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