OT: Talking Cars Tuesday: EVs and the IRA Tax Credit
OT season's ending so lets do this: The IRA has put many people looking at purchasing EVs in Aug-Dec in a bit of a holding pattern. My kid just turned 16 and we were planning on maybe the Ionic5 for my wife and handing down the 2015 Soul to the kid. Well, nuts to that. Now we're thinking about the Bolt EUV (2023) but are holding out hope that it qualifies for a tax rebate due to the new IRA if we take delivery in Jan. It should initially qualify, but for how much is an open question. Production and shipping being what it is, timing the order for Jan delivery is a bit like threading a needle.
So, for any potential EV shoppers out there, what have you either considered or purchased recently, and did the recent IRA change your calculus?
Summary of Tax Credit status here:
August 23rd, 2022 at 12:20 PM ^
I just got a PHEV because it was a cheaper option and all I needed, but certainly the partial credit I got made it an even more attractive buy - the numbers still worked out on gas savings even without the credit. The problem with EVs are that there arent very many options out there and a lot of them are going way over sticker price due to supply crunches. I'd guess we're still 5-10 years out on serious adoption, but it's nice to see us heading in that direction
August 23rd, 2022 at 12:22 PM ^
Eh, how 'bout those Ford layoffs?
August 23rd, 2022 at 12:25 PM ^
Not due to EVs - I believe Ford has already booked all their EV sales for next 2 years.
August 23rd, 2022 at 12:32 PM ^
Actually, EV adoption was cited as a reason for the need to "re-align corporate assets" at Ford.
August 23rd, 2022 at 12:38 PM ^
Which is what every automaker is doing now. Shouldn't need mass layoffs to do it.
August 23rd, 2022 at 1:12 PM ^
EVs require less man hours to assemble. The drive train is also simpler. In the shorter term more engineering work is probably needed to develop a mature platform. Unless Ford massively expands their market share they will need less people.
August 23rd, 2022 at 1:16 PM ^
1. Transitions are *always* disruptive.
2. Recession is either here or on the threshold, depending on how you like to play your math. Boom is over, bust is now the economic state (and not the pleasant kind of bust).
This is NOT going to be pretty anywhere except when we run the table and go back to the CFP.
August 23rd, 2022 at 12:45 PM ^
Corporations always blame anything else but their own choices for layoffs in order to increase profits.
August 23rd, 2022 at 12:23 PM ^
It would be nice if those of us without the budget for shiny brand new cars got a tax break for some of our important purchases, too.
August 23rd, 2022 at 12:37 PM ^
Like the $3200 per adult and $2500 per child stimulus checks that went out April 2020-March 2021? And the $3600/$3000 child tax credit in 2021?
August 23rd, 2022 at 12:50 PM ^
I wasn't aware that consumers of electric vehicles were excluded from those benefits.
The economy certainly has shown no ill effects from that money.
August 23rd, 2022 at 11:03 PM ^
Well... there is a little bit of an inflation issue. Some of that is likely due to the last few years of increased government spending (not just US, but most nations), but certainly not the whole story.
August 24th, 2022 at 10:34 AM ^
Your point was that you wished "those of us without the budget for shiny brand new cars" could get "a tax break for some of our important purchases, too" so I literally pointed out two programs that handed *cash* directly to those people that matched your criteria. Because those programs were designed with lower income limits, it is true that plenty of consumers of electric vehicles were indeed excluded from those benefits.
August 23rd, 2022 at 1:34 PM ^
I agree that people complaining about tax credits generally should check their own accounts beforehand, but I will say that I personally didn't receive anything close to those amounts despite being both an adult and having children over that entire period.
August 23rd, 2022 at 4:42 PM ^
Which get eroded due to inflation caused by dumping that kind of cash on the general public.
August 23rd, 2022 at 12:40 PM ^
You've been getting breaks on oil and beef and countless other things for as long as you've been alive.
August 23rd, 2022 at 12:59 PM ^
Well, the tax credits extend to pre-owned EVs next year. And there are all sorts of state and federal tax credits for things like high-efficiency furnaces, appliances, farm equipment, and solar panels.
August 23rd, 2022 at 1:16 PM ^
Higher income people and more expensive cars don't qualify for the tax credits either. The credits are pretty well targeted to people who's buying decision can be most influenced by the discount.
August 23rd, 2022 at 2:06 PM ^
The credits are effectively ending, for a few years, when the IRA takes affect because of the manufacturing requirements. More credit goes to the vehicle that has more American made parts and minerals (for the battery) mined in North America. Okay fine, but there is virtually no phasing in of those requirements. So the bottom line is that the tax credits sound really good on the surface, but they won't be so good in reality.
August 23rd, 2022 at 3:49 PM ^
Well, with any luck we'll all get our student loan debt cancelled!
August 23rd, 2022 at 12:26 PM ^
My lease is up in January so I've at least kicked around the idea of an EV. I have looked into the Kia EV6, Hyundai Ioniq 5, Mustang Mach-E and the Audi Q4. The first problem with these is good luck finding them. They either aren't on Dealer lots at all or there is a 10-15k dealer markup, so even with the 7.5k refund they aren't a good deal.
The second problem is the infrastructure isn't there. I recently took a road trip and according to google maps and there was a segment where there was 250+ miles between chargers. Every vehicle under consideration either flat wouldn't make it or would be so close as to make be very nervous.
But as to your actual question regarding the EVs and tax refunds -- I think I read 70% of the EVs wouldn't qualify under the new rules. And to my earlier point with supply shortages, the EVs are hard to find and are marked way up.
In the end, I'll probably either buy out my lease or stick with an ICE vehicle for the next 3-ish years. But I imagine that my next next car will be an EV.
August 23rd, 2022 at 12:34 PM ^
I think your last sentence is pretty spot on. In about 3-5 years the car companies will have adjusted to the new rules and many options will both be available and much more affordable.
August 23rd, 2022 at 12:36 PM ^
People will ride their gas vehicle down to under 10 miles to empty but are worried about only having 50 miles left when they'd be reaching a charging station. It's really simple to read the exact capacity left on a battery, while it's really difficult to determine how much gas is left in the tank.
August 23rd, 2022 at 1:06 PM ^
Come on that's not a fair comparison. When people get low on gas they pull into a station and fill up and are on their way. If your EV battery is running low then you not only have to find and get to a charging station but it has to be available and you'll have to wait, possibly for hours, for your battery to charge enough to get you where you're going. Unless you're fortunate enough to have a Tesla which allows level 3 rapid charging in a fraction of the time.
August 23rd, 2022 at 1:52 PM ^
Time is definitely a concern on road-trips.
The GPS in EVs is setup to determine what charging stations you're going to need to stop at and for how long
August 23rd, 2022 at 3:02 PM ^
Ever arrive at an EVSE, with not many miles left, only to find that it's not operating? Or some yahoo cut the cable in anger? Not fun, at all. Also, AAA can bring you five gallons and get you quite a few miles. Can't do that (yet) for an EV.
August 23rd, 2022 at 3:30 PM ^
If you take lots of 200+ road-trips, an EV is probably not for you. If however you are a multi car family, there is probably a good chance that one of your cars is used for commuting and local trips and for that an EV is perfect.
For a longer trip, an EV is definitely a bit more of a hassle, but with planning, you can make it work. Most EVs can use fast chargers and do not take hours to charge to 80% (charge time definitely goes up for that last 20%).
Drive 200 miles, stop for a 30 to 45 minute lunch and you are good for another 200 miles. This strategy might not work as well depending upon where you hit that 200 mile mark, but from my experience, it works on the east coast.
August 23rd, 2022 at 3:37 PM ^
Incorrect--level 2 chargers for non-Tesla EV's do not charge to 80% in 30-45 minutes. It takes several hours to get from ~10-20% up to 60-80%. Until charging station adapters are widely available and Elon Musk allows us civilians to use them on his fast chargers (level 3) it will require a much longer pit stop to get a non-Tesla EV sufficiently charged to get back on the road and travel 100+ additional miles before needing to stop again.
August 23rd, 2022 at 4:36 PM ^
A Hyuandai Kona chargers to 80% in 54 minutes. If you have only driven 200 miles, it is not at 0. It will be at approximately 20%. You can definitely go from 20% to 80% in 45 minutes. Have personally done it more than once.
https://www.chargepoint.com/blog/everything-you-need-know-about-charging-hyundai-kona-electric
August 23rd, 2022 at 5:15 PM ^
Obviously you are lucky enough to have access to a level 3 charger! The link you posted indicates that level 2 charging--by far the most common available to non-Tesla EV owners--takes ~10 hours to fill up.
I take it from your handle that you live in DC so maybe the major metro areas have more level 3 chargers for non-Teslas than I realized. If so then I am pleased to hear it. Out here in the hinterlands we have no such level 3 chargers available for our non-Tesla EVs. I hope the EV infrastructure continues to expand but for the time being it seems to be a slow process.
August 23rd, 2022 at 5:28 PM ^
Drove from DC to upstate NY, finding level 3 chargers was not a problem.
Also, you may want to read more closely before calling someone incorrect. Nowhere in my post did I mention a level 2 charger. I said most EVs can charge to 80% in less than an hour. That is absolutely correct. Whether you can find a charger to do that is obviously a different question. My experience has been that it is not that hard to do on the east coast. But planning is definitely involved.
August 23rd, 2022 at 4:27 PM ^
This is absolutely my experience. I’m a little bit into year 2 of EV owning (Hyundai Kona, which I would definitely recommend to those in the market), and we’ve had one time in that year when we had charger anxiety. It gets us pretty much everywhere we want in New England on a single charge. We had one mistake in July where we didn’t charge as much as we intended prior to leaving and then passed three different rest areas with broken chargers. We made it home anyway with about 15% charge, and all was well.
I think the biggest thing about charging anxiety is that it’s new. So a) if you don’t have a Tesla, you have to search multiple apps to find your Level 3 charger, and b) how trustworthy is that range indicator on your car? We’ve learned that the Kona’s is pretty good. It told us we’d have 40 miles to spare when we started out that day and we did. We took that same drive two weeks later and didn’t have any anxiety when we started it at 66%, because now we had experience.
On road trips, having an EV is a little trickier because yes, you have to plan where you’re going to charge your car at your destination, in a way that’s different from finding a gas station. But also, most people tend to return to the same locations, typically near family, and finding the charger that works for you is typically something that once you’ve done it becomes part of your routine. For me, it’s the Level 3 charger at the supermarket 20 minutes away from my in-laws, so I get a ready-made excuse to step out for 90 minutes or so on Thanksgiving weekend. You won’t find me complaining. You also won’t find me complaining about the cost of gas, or about spending zero minutes filling up my car when I’m not on a road trip. Yes, there are about 10 days a year when I have to pay attention to my charge/go a little out of my way to find a charger, but for the other 355 days a year I don’t have to think about stopping at a gas station, because my fuel comes from my house, and I always have enough. In other words, I don’t have 40 10 minute trips to the gas station a year, but rather 5 90 minute trips. The overall amount of time spent charging is comparable to the time spent filling a gas tank, in terms of minutes I spend at the activity. They’re just clumped up rather than spaced out.
August 23rd, 2022 at 1:12 PM ^
It's really simple to read the exact capacity left on a battery
How accurate is that, though, especially for EV's that are a few years old? Both my laptop and phone will experience large drops as the battery gets below 50%. We're not talking 1-2% at a time; rather, for example, my laptop will drop from ~40% to around 20%, and then that "20%" only lasts about 10 minutes or less until it shuts down completely.
I feel like it's easy to get a good feel for how many miles you can get once the gas light comes on, and that doesn't really change. But my battery meters seem to get less accurate as my electronics get older...
August 23rd, 2022 at 1:33 PM ^
Not very accurate. Mileage depends heavily on driving conditions (temp, lead foot, hills, etc) moreso than gas driving.
Common phrase for the 'fuel' indicator for EVs is the "GoM" aka, the guessometer
August 23rd, 2022 at 1:50 PM ^
Mileage depends highly on conditions...but the displayed milage is still accurate. You're never going to see it say you have 100 miles remaining when you only have 20.
August 23rd, 2022 at 1:57 PM ^
I feel like it's easy to get a good feel for how many miles you can get once the gas light comes on
OEM's don't really know how much gas you have left, that's why they err on the side of safety and you probably have 20-30 miles left below "0". The way gas tanks are manufactured, they vary by +/- 0.5 gallon part to part. Then you have fuel sloshing around in the tank, changing the float level depending on incline/decline. Then the detection method... trying to use a resistor card and float to measure resistance vs. on an EV you can measure voltage directly.
August 23rd, 2022 at 2:01 PM ^
Not a fair comparison when there are currently gas stations on every corner of the country. EV charging infrastructure while growing has been pretty unreliable. Browse any EV forums or the reddit EV subs and you'll see constant complaining about how poorly maintained or inoperable a lot of the chargers are. It'll need to improve before non-enthusiasts really get behind electric cars
August 23rd, 2022 at 8:56 PM ^
I own an EV6. Yes, long road trips are a bit of an issue, but we don’t take many. If your stated range is 300 miles, remember that your interstate miles will max out around 240, and that’s from 100% to 5%. And when you charge up on a supercharger, you’ll only want to go to about 80%. Your effective miles/charge for all interstate miles is somewhere around 160-180. That’s 2.5 hours each and a 20 minute charge.
the reality is EVs are not for road-trips with the notable exception of Teslas. Their infrastructure is immense. You’re almost never more than 50-60 miles from a Tesla supercharger.
August 23rd, 2022 at 12:27 PM ^
While I expect my next purchase to be EV, it doesn't change the timing and won't have any impact on my purchase decision. My current is a 2011 that I expect to get at least another 100,000 miles out of, and by that time like lhglrkwg mentioned there should be lots more models to choose from and the inflated sticker-price / supply constraints should be worked out.
August 23rd, 2022 at 2:10 PM ^
Yeah I briefly looked at getting an EV but they're pretty steep generally speaking. I have a Prius which I got new for about 25k after the credit and it's a Toyota so it should be reliable for a long time. For the cheaper EV makers, I had a bad experience with a prior Chevy and I'm not sure I trust Hyundai and Kia yet, so I elected to wait and see on them. By the time I need another car (2030-2035) I'm guessing there will be a number of sub 35k options out there, the reliable EV makers will become known, and charging infrastructure will be better. For now, it's largely a rich EV-enthusiast's world
August 23rd, 2022 at 12:29 PM ^
just a flat no to electric vehicles until it is just as easy to drive from home to SW Missouri, Nashville, Raleigh, etc with an EV as it is a gas vehicle, which includes figuring out how to harge a car as fast as it takes to fill up.
not trying to turn a 9 hour drive into an 12 hour drive because of charge time and have to pre-plan routes instead of just using the fastest route.
August 23rd, 2022 at 12:42 PM ^
EVs shouldn't really be viewed as a long distance option right now. If I needed a new car today I would buy an EV but only for use as a commuter car. Would keep a gasoline car on hand for the longer trips
August 23rd, 2022 at 1:20 PM ^
Last week I made an 11-hour, one way run to upstate NY and then back in a Tesla. 3 stops each way, probably took me an extra 20-30 minutes max over a gas car and was not a hassle at all. Car calculated my stops although I did monitor it. I could have gone in a gas car but I prefer my car so it was worth the extra time. Certainly, it's not quite as convenient but it's very doable, especially if most of the driving is highway.
August 23rd, 2022 at 1:54 PM ^
Hopefully by the time I need a new car, other manufacturers will have caught up with the charge times and infrastructure. I just don't trust Tesla, given the problems they've had with quality control, parts availability, safety, etc.
August 23rd, 2022 at 2:20 PM ^
Yes, it looks like others are finally designing good EVs now, the infrastructure and supply just needs to catch up. Once the longer trips problem is more fully addressed and the initial "startup" problems are overcome, there should be very good options.
And yes, Tesla has had some missteps along the way (not really surprising for a startup given that other EV makers like Chevy, Nissan, Jaguar and BMW with less revolutionary changes have experienced probably bigger issues), especially on the service and repair side. Based on only the experiences I have had and others that I talk to, most are happy with their vehicles. I am 4.5 years in and I am very pleased with my decision. I had three items (suspension component, rear tail light and trunk cabling/harness) replaced under warranty. None of those items stopped me from driving or disabled the vehicle and IMO the quality has been superior to my previous BMW. No other costs beyond tires. I am out of my initial warranty now so we will see, but so far, I am extremely happy with the car and would buy one again easily. As to the safety, I frequently hear that Teslas are among the safest cars on the road (except for crazies doing stupid things with self-driving for YouTube). Fortunately, I have no experience there. YMMV.
August 23rd, 2022 at 1:22 PM ^
It's simply impractical to own and use an EV for long distance travel right now. Teslas can charge quickly on the road and their charging stations are quite plentiful in many places. But non-Tesla EVs take hours to charge and unless you're retired with nothing but time on your hands on a long distance road trip no one is going to put themselves in that position. And that's all before we get to the shape-shifting nature of who qualifies for the tax credits, which vehicles qualify and are available, or the myriad other long term issues. We bought a Kia Niro EV last December, got our full tax credit and LOVE the vehicle but use it for commuting locally only. Our 10 year old minivan and 5 year old SUV are what we take out of town.
August 23rd, 2022 at 1:59 PM ^
yea, but there's a lot more I'd like to do with my hard earned money than have two cars when one car fits the bill just fine.
August 23rd, 2022 at 3:49 PM ^
This. I could make an electric car work. Only for my wife's commute, and only if we plan when we head into town to make sure it's topped off. It's 45 minutes to the nearest fast charger of any kind. Then I have to have another car for any trip to our parents, or any other road trip we get the urge to do. So I either give up my truck for the electric, or get another vehicle. My truck will last another few years just fine.
I'd totally do a hybrid with 30-40 miles range on electric. That would replace my wife's car one for one. Good luck finding one of those for sticker.
August 23rd, 2022 at 12:30 PM ^
48K (starting MSRP) after the tax credit with a 300 mile range. Not to mention the less then reliable data on battery depreciation. Public charging stations not optimal. The tech is about 5-10 years away before this makes financial sense.
However they are making good looking EV finally
2023 BMW i4 eDrive40
August 23rd, 2022 at 12:39 PM ^
Test driving one soon. Been looking at this one for a while