IRS Issues Statement on New Plug-In Electric Drive Vehicle Credit (IRC 30D)

[MalthusUNC]

I have a reservation that I hope will be able to be converted into an order in the next month. Obviously, that is not a given that I'll get the email to convert my reservation.

Given the 2023 price increase and the loss of a portion (or all) of the tax credit (either due to the price of the vehicle I order or my income limits) - It would make financial sense to search high and low to try and find one at a dealer prior to the end of 2022 - even if I have to pay a premium to the dealer. Does that sound correct?
EDIT to add - obviously the premium should be less than the price increase and loss of tax credits.

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[cvalue13]

EDIT to add - obviously the premium should be less than the price increase and loss of tax credits.

This, I’m afraid, is where the wrench will enter your works

 

[cvalue13]

True..point of sale doesn't kick in until 2024....the *real* question is whether you can essentially accomplish the same thing by claiming a refundable credit for the full $7500 on your 2023 tax return.

If not..that would mean the credit in 2024 is substantially more valuable to low-mod income buyers in 2024 vs 2023.

Thus far it does not appear they have converted it to a refundable credit, which is a shame because the people making less than the necessary income to get the full credit are the ones that could use the full credit the most.

Some friends at Orrick have, surprisingly***, done a piece on the personal EV-related provisions - which I broadly recommend as a summary, including some insightful observations.

On this point of the refund-ability, their tax-lawyer-ly observation is as follows:

“ Permitting taxpayers to transfer the credit to the dealer from which the vehicle has been purchased if the dealer has been registered with the Secretary of the Treasury and meets other requirements.

Observation: This provision is conceptually similar to separate IRA proposals for certain renewable energy tax credits. It appears designed to permit taxpayers who cannot efficiently use the tax credit to benefit from them indirectly in exchange for a payment from the dealer. Any payment received from the dealer is tax free to the recipient.”

Accordingly, appears to appear to them now how it appeared to appear to me then: basically, a synthetic rebate that will be use-it-or-lose-it at the POS for those not otherwise tax-ripe for the full value of the credit.

***I say surprisingly because Orrick is a large, global, law firm representing corporations for far more complicated/valuable tax issues than personal income tax EV rebate analysis; I suspect they’d been asked by a corporate client to analyze from the businesses’ perspective and figured, wth, let’s put a version out there as marketing, too.

EDIT: meant to add link to full summary

https://www.orrick.com/en/Insights/...r-Clean-Motor-Vehicles-and-Refueling-Property

 

[cvalue13]

The DOE announcement referenced above posted in full below as well

https://afdc.energy.gov/laws/inflation-reduction-act

Playing with the Ford MY23 builder, I noticed that it also points to this DOE announcement/summary

 

[MalthusUNC]

This, I’m afraid, is where the wrench will enter your works

LOL. Yes. I am just making sure that I'm not crazy and missing something. I have found a dealer who is 2 1/2 hours away and has a canceled order that is supposed to be in within the next month (I've been through that with my Mach E so I'm not holding my breath). So far (I haven't received anything in writing officially) it looks like he just has a $2,500 markup over the 2022 window sticker.

In that scenario, it would be a no-brainer to go ahead and get it. Not only is there no guarantee that I will get to place an order this cycle, but even if I did get to place an order, I could be enjoying the truck for the next year rather than having to wait. Anyway, we will see how it goes or if he tries to add it on at the end.

Also, thanks for starting this thread! Very informative.

 

[MalthusUNC]

This, I’m afraid, is where the wrench will enter your works

HAHA. Literally, as I was hitting Post Reply above, the phone rang and they are adding a $35,000 price adjustment.

 

[cvalue13]

HAHA. Literally, as I was hitting Post Reply above, the phone rang and they are adding a $35,000 price adjustment.

yea, it feels like dealers are being very coy online about their markups, and instead keeping them on the down-low by voice conversations

Perhaps Ford has told them to stop being so brash, or perhaps instead dealers have decided it’s a bad look to so publicly flog their markups

 

[MalthusUNC]

yea, it feels like dealers are being very coy online about their markups, and instead keeping them on the down-low by voice conversations

Perhaps Ford has told them to stop being so brash, or perhaps instead dealers have decided it’s a bad look to so publicly flog their markups

Probably. Makes sense.

I went through this with my Mach E. I had one on order but it was taking forever (not forever by the standards of the people who had placed their orders in 2019, etc.) so I started looking around and I found all these stock photos or even real photos and it was bait and switch to get you to come in and place an order with them. Which I get. Anyway, I eventually found a First Edition about 3 hours away that was on the lot, had 17 miles, and they sold to me for sticker price. I was kind of hoping to find lightning in a bottle again (pun intended). But this time, I had a little play between the mark-up and the lost tax savings/price increase. Oh well. Glad I tempered my expectations.

 

[ExCivilian]

I was kind of hoping to find lightning in a bottle again (pun intended).

I wouldn't be so pessimistic. My dealership currently has two on the lot with green window stickers and one with a blue window sticker. I believe the former are customer order while the latter is a mannequin. The mannequin has a $20K ADM but when I asked the owner he said he just slapped that on there so people quit calling him. He plans on selling it at MSRP or "maybe a few thousand over," which may not be much of anything at all because it's on a 2" level kit w/ aftermarket wheels/tires.

Instead of trying to beat the market with these clowns, you might be better off negotiating for a mannequin when they're off stop-sale roughly toward the end of the year. That leaves a few months for that new-car-on-the-block smell to dissipate, too.

 

[MalthusUNC]

I wouldn't be so pessimistic. My dealership currently has two on the lot with green window stickers and one with a blue window sticker. I believe the former are customer order while the latter is a mannequin. The mannequin has a $20K ADM but when I asked the owner he said he just slapped that on there so people quit calling him. He plans on selling it at MSRP or "maybe a few thousand over," which may not be much of anything at all because it's on a 2" level kit w/ aftermarket wheels/tires.

Instead of trying to beat the market with these clowns, you might be better off negotiating for a mannequin when they're off stop-sale roughly toward the end of the year. That leaves a few months for that new-car-on-the-block smell to dissipate, too.

Thanks for the positive vibes. I'll probably do like I did with the Mach E and just keep looking every now and then. After about three weeks, I found an actual real car. It is just frustrating having to sift through the mannequins (or worse, just glamour photos of the truck). And I get the feeling that the Mannequins are all six months out which would put them into next year (and doesn't help for the $7,500 tax credit).

But that brings me to a question that I had after looking through all these. Do you think anybody is actually paying $20K to $35K over just to have one now? I could see $5K or maybe even $10K if money isn't an issue - but surely not $20 to $35K.

 

[cvalue13]

Do you think anybody is actually paying $20K to $35K over just to have one now? I could see $5K or maybe even $10K if money isn't an issue - but surely not $20 to $35K.

a member here just had a dealer pay them $20K over MSRP to re-purchase the vehicle

My dealer in ATX has a live auction for used vehicles running all day, can be watched from showroom - while I was picking up my Lightning, a Platinum auctioned to a dealer for $130K

eBay has plenty of sold listings suggesting similarly

Surely not all are getting such premiums, but I think for now there is plenty of money chasing rare

 

[ExCivilian]

Do you think anybody is actually paying $20K to $35K over just to have one now? I could see $5K or maybe even $10K if money isn't an issue - but surely not $20 to $35K.

I doubt many people are paying over sticker "just to have one now." I do think some people are throwing that kind of cash down because it's "new-car-on-the-block smell," which should hopefully dissipate within a few months. That's why I mentioned that most people haven't even seen one, yet. Hopefully that calms down...

...that said, there are a lot of people who need to pay that much (and more) because they need the truck. Same reasoning I told my wife when we looked at F150s on the lot last year with as much as $65,000 ADM! She was a bit stunned and asked out loud, "who is paying that?" and I responded, "someone who needs a truck now." and the sales person just nodded and also reiterated they don't sell customer orders with ADM.

Whether the mileage pencils out, comparing it to an ICE F150 (also with $25K+ slapped on them), or the fact that it's the only thing available on the lot (hard to believe but some of the dealerships around here in LA have two or three vehicles on the lot), there's going to be some people who find the numbers make sense for them.

Also, while I don't think there are many in this category collectors do exist. I don't know the exact number of sales like this, but one of the reasons these sales are discussed is because they're rare. Is it ten, twenty, two hundred? It's not many whatever the number...because there aren't many to go around, in general. At least some of those are going to wind up behind glass and it's unclear what their value will be in 50 years but I've mentioned elsewhere the F150L will be in a number of museums if it isn't already.

 

[GunRack]

I made a similar mistake when I ordered our lightning but didn't put it in my wife's name. In CA, buyers are only eligible for one CVRP rebate (from the state) and I already submitted for one last year.

I'm in a similar situation too. I bought an i3 in 2019 before the one rebate per lifetime rule went into effect 1/1/2020. I got the car and filed the paperwork in December 19. It was approved and paid out after the rule was in place in Jan 2020. The rules said if you got one previously, you could only ever get one more. I had 3 previously to that but CA did pay out my 4th in Jan 2020.

Now... question is... did that 2019 application count as my one more ever only, or was that application pre one more ever rule? IDK, I applied for another one with the Lightning and I believe technically this 5th one will be my one more final post 2020 rule. But... it hasn't been paid out yet and status is still pending. So IDK.

I asked the dealer about putting my fiance's name on the paperwork but they suggested that wouldn't help in terms of CVRP since they'd apparently look at my name too and address. Really not sure. But it didn't matter in the end because the dealer thought it could be an issue for Ford since only my name was on the reservation. Maybe being actually married would have been the difference. Maybe they just didn't want to mess around with multiple names on the paperwork.

I'll be happily surprised if my Lightning CVRP get approved. But I'll understand if it doesn't. Certainly had more than a fair share of electric rebates.

 

[ExCivilian]

I asked the dealer about putting my fiance's name on the paperwork but they suggested that wouldn't help in terms of CVRP since they'd apparently look at my name too and address.

I'm not sure regarding the ins/outs of being married vs. an unmarried couple but the rule on the CVRP site is 1 per person with other members in the household still eligible per person. It's already codified and well-established law that "marriages" don't enjoy more protections/benefits than "domestic partnerships." While that movement was focusing on same-sex couples, it applies just as well to opposite-sex couples, too.

Regardless, placing both our names on the purchase contract was a suggestion straight from the horses' mouth. The rep at CVRP was clear that one can only submit for a name on the paperwork so my wife's name *must* be on there to qualify. It'd be difficult for them to bar anyone from applying simply because a spouse was a listed co-buyer on the paperwork...if for no other reason than in CA I'm a co-buyer whether I like it or not and regardless of whether I sign the contract

It *might* run afoul of Ford's policies largely because it's going to look like a co-buyer on the paperwork and there's no way to distinguish that from you and me buying one together, for example, to circumvent the order process. Hope you get it...I would have just put her on the paperwork with married name in the same situation. If someone's really worried about it, you can get married in CA in an afternoon without even going to the court house via what's known as a "secret marriage" (lol).

Had to do that with my wife, actually. She's Chinese and we had a traditional tea ceremony so I was standing around doing my part and then realized that there wasn't an officiant! I asked her who she had thought would be signing our marriage certificate and she said oh yeah I mean we don't do that kind of stuff you know? jeez...off to google we went and got "married" at the beach within a few hours

Ten years later and I'm still dealing with two wedding anniversaries (and two New Years but that's a different story)...

 

[GunRack]

I'm not sure regarding the ins/outs of being married vs. an unmarried couple but the rule on the CVRP site is 1 per person with other members in the household still eligible per person. It's already codified and well-established law that "marriages" don't enjoy more protections/benefits than "domestic partnerships." While that movement was focusing on same-sex couples, it applies just as well to opposite-sex couples, too.

Regardless, placing both our names on the purchase contract was a suggestion straight from the horses' mouth. The rep at CVRP was clear that one can only submit for a name on the paperwork so my wife's name *must* be on there to qualify. It'd be difficult for them to bar anyone from applying simply because a spouse was a listed co-buyer on the paperwork...if for no other reason than in CA I'm a co-buyer whether I like it or not and regardless of whether I sign the contract

Glad to know. I didn't do research on co-signers before I was at the dealer. The whole call from the dealer and me there signing was less than 2hrs. I had expected my truck was still a week away so I just went with whatever the dealer was telling me. It did seem they were more concerned about the Ford rules being I was the first Lightning being actually sold there.

We're planning to get my soon to be wife an EV6 at the first of the year so at least she'll still be able to qualify for the CVRP rebate on that. She might be upset if I had taken her $2000 credit.

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