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Transportation Power United States

Toyota Will Be the Third Automaker To Lose the EV Tax Credit In the US (theverge.com) 63

Posted by BeauHD from the never-meant-to-be-permanent dept.
Toyota sold its 200,000th plug-in electric vehicle in the US, triggering a slow phaseout of the federal EV tax credit over the next 15 months, according to Bloomberg. The automaker is the third manufacturer to pass this mark, following Tesla and General Motors. The Verge reports: The phaseout for Toyota is poorly timed, coming just weeks after the company's new electric SUV, the bZ4X, went on sale in the US. It's the latest bad piece of EV news to hit the automaker, coming just a few weeks after it was forced to recall the bZ4X over loose hub bolts that could cause the wheels to come off while driving. Toyota pledged to spend $17.6 billion to roll out 30 battery-electric models by 2030.

The phaseout of the federal tax credits begins two quarters after an auto manufacturer sells 200,000 plug-in vehicles. Customers of Toyota cars that are eligible for the credit (like the bZ4X and the plug-in hybrid Prius Prime) will only be able to receive a maximum of $3,750 starting on October 1st. The maximum available credit will halve again on April 1st to $1,875, and it will completely phase out six months later in October 2023. A Toyota spokesperson confirmed the scheduled phase-out to The Verge.
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Toyota Will Be the Third Automaker To Lose the EV Tax Credit In the US More

Toyota Will Be the Third Automaker To Lose the EV Tax Credit In the US

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  • Word on a private Facebook group [facebook.com] is that Toyota is loaning out Chevy Spark subcompacts while the recall repairs are taking place. Word is also that those repairs will take three months.
    • As far as the phase-out goes, why not sell the car without tires to a new shell company, have the shell company install tires, and reset the counter on the discounts to 0? You could theoretically keep recreating new shell companies to qualify for the 200k discounted cars by making almost a car a sub-assembly and making the final product complete by said shell company. You then have the shell company sell the now completed cars back to the dealership.

      • Already in the works. The bZ4X SUV is slated to also be sold as the Subaru Solterra.

      • Re: (Score:2)

        by DaHat ( 247651 )

        Is the benefit of such shenanigans worth the cost?

        At least with the "Chicken Tax" it was, and lead to all sorts of similar shenanigans: https://en.wikipedia.org/wiki/... [wikipedia.org]

        In both cases, regulators would/did put a stop to it.

        • Personally, given the oil and energy crisis sparked by Russia, I'd be extending the credit. Double it to 400k cars, give a constant rebate just for buying an EV, without limit on the number sold by the company, etc...

          • Re: (Score:3, Insightful)

            by DaHat ( 247651 )

            The oil and energy crisis wasn't sparked by Russia, it was made worse for sure, however it's origins are purely domestic in origin.

            So nice of you to want to extend a tax-credit to higher income people who can afford not just to buy new cars, but rather expensive new cars as well... the collective purchasing of which thus far represent a drop in the bucket of oil consumption.

            Sure a shame the current occupant of the Whitehouse is so hostile to oil and has taken every opportunity over the last year and a half

          • What puzzles me is that Toyota only recently -- and just barely -- introduced an EV. That plug-in hybrids count against the quotas seems counterproductive, since their battery capacity tends to be rather limited.

  • No longer needed (Score:5, Insightful)

    by Powercntrl ( 458442 ) on Wednesday July 06, 2022 @07:48PM (#62679666) Homepage

    The tax rebate doesn't make a difference if a BEV isn't in your budget to begin with. Conversely, if you are in an income bracket where you're shopping for the average priced new vehicle, the loss of the tax rebate shouldn't break the bank. Furthermore, considering that the rebate ran out for Tesla awhile ago and they're still selling their cars as fast as they can build them, it doesn't seem to be a problem.

    • It was there initially because BEVs do not have any gain in the marketplace from subsidies the US govt gives the oil and gas industry to lower the cost of fuel. Those subsidies are still there, so without these, the auto-market is an unlevel playing field.

      • It was there initially because BEVs do not have any gain in the marketplace from subsidies the US govt gives the oil and gas industry to lower the cost of fuel. Those subsidies are still there, so without these, the auto-market is an unlevel playing field.

        EVs also don't pay fuel taxes that are used to maintain the highway infrastructure. Level is in the eye of the beer holder.

        • Re: (Score:1)

          by Anonymous Coward

          EVs also don't pay fuel taxes that are used to maintain the highway infrastructure.

          Not fuel taxes, but they do pay extra in registration. I had to pay 30% extra to register my Nissan Leaf EV compared to my VW New Beetle TDI.

          Given the very limited range of the Leaf (66 miles/charge at this age of it's life), I'm not even likely to use the highway infrastructure in my Leaf. Yet I'm still dinged extra registration tax. It's total BS.

          • Not fuel taxes, but they do pay extra in registration.

            Perhaps where you live. It is hardly universal.

        • Re: (Score:2)

          by jjhall ( 555562 )

          Many states have add-on fees during registration to reclaim the loss from fuel taxes. EVs are an extra $140/year, and PHEVs are an extra $75/year in Idaho where I live. Opponents have run calculations that show the amount of fees collected from EV/PHEV owners far outweighs the loss of gasoline tax revenue. This means those owners are actually paying more than their fair share directly, on top of the added subsidies that the fuel producers receive. It is nowhere near a level playing field, it is heavily

      • The O&G subsidy complaints are a little overblown.

        U.S. energy companies on the S&P ran about 8.2% profit in 2021, a much improved year. That's after everything, including the subsidies, which were something like $20B for the American firms. This places them firmly in the rear of American economic sectors, only ahead of "Consumer Staples", and vastly behind Financials, Health Care, Pharma, and Real Estate.

        Exxon, for instance, had a banner year in 2021 - $23.6B in profits. But they lost $22.4B in 2020

    • Re: (Score:2)

      by AmiMoJo ( 196126 )

      A nice alternative is a "cash for clunkers" scrappage scheme. Get the worst polluters off the road, replaced with EVs.

      • People driving "clunkers" are generally not affluent. Unless you're prepared to give then enough for their clunker to buy EVs, they won't be in a position to take advantage of your offer.

    • Re: (Score:2)

      by Monoman ( 8745 )

      It may not break the bank but it will influence purchasing decisions. Tesla is still selling better than the rest just shows how far behind the competition is. Ford and GM are starting to get some momentum but it is going to take time.

      We've owned a Tesla Model 3 for a few years and it has been great. I think plug in hybrids might be the sweet spot for bringing EV to the masses. It provides an introduction to the tech and should address range anxiety.

  • Toyota decided long ago that its bread-n-butter would be hybrids. Everything else has been a compliance car at best or an extended trial/concept exercise at worst.

    And the bZ4X, the first all-electric vehicle since the RAV4EV, is apparently wet fart. The car itself is getting "meh" reviews across the board and Toyota seems to have absolutely no interest in marketing it.
    =Smidge=

    • Toyota decided long ago that its bread-n-butter would be hybrids.

      Nothing wrong with that. They are better at it than almost anyone.

  • We can eliminate millions of gallons of gas usage by offering $7500 on smaller -gas- vehicles like Honda Civic which gets 45MPG without any batteries just ICE. Most people just don't need large SUVs and this would encourage people to buy smaller cars. It would be a nice stop gap until the battery technology and shortages improve. Not to mention a Civic with that discount would be under $20k which more people can afford over a $40K model 3

    • Re:Tax credit for small -gas- vehicles (Score:4, Insightful)

      by Smidge204 ( 605297 ) on Wednesday July 06, 2022 @09:43PM (#62679920) Journal

      Well for one thing, that might reduce gasoline consumption but it would not eliminate our the influences of the petroleum market. Electric vehicles are well insulated from the market prices of petroleum, more so as renewable energy rolls out.

      For another thing, there's a reason why the average new car price in 2020 was over $40,000. Honda Civics don't sell as well as Chevy Silverados and it's not because they're too expensive... it's almost like the plurality of people buy the vehicle they actually want rather than the cheapest POS econobox they can find!

      Lastly, the problem is there's no such thing as a "stop gap" - as long as the market favors combustion engines, they will produce, market and sell combustion engines. The market is too near-sighted to make the kinds of changes necessary before it's too late. (Spoiler alert: it's basically already too late, which proves my point). BEV tech has been "good enough" for about a decade now and the issue is getting people to actually see that for themselves.

      To that end, the whole point of the tax incentive - which IMO should have been a straight up flat rebate so people who don't have $7500 in tax liability could actually get it - was to essentially twofold: First, offset the R&D and tooling costs for each manufacturer (the total incentive per manufacturer was not as arbitrary as you might think...). Second, the idea of a rebate is also a marketing ploy used to get people to consider an EV who otherwise might not have, because even if the product is still more expensive the idea of a rebate/discount is still something that attracts attention. In that respect it's been an amazing success.
      =Smidge=

      • Still not convincing me of the affordability issue - electric car makers are raising prices by $5k already for shortages. Insuring a $45k car costs more than a $20K car and taxes on a $45k car will be more than twice than the cheaper car.

        • > Still not convincing me of the affordability issue

          I don't know what you need convincing of? The mere fact that the cheapest vehicles on the market are NOT also the most popular ones is proof enough that cost alone isn't the main deciding factor. People want nice cars and trucks that suit their needs, lifestyles, and self-image, and are willing to pay more for that.

          Even a Honda Civic is not the cheapest new car you can buy. Why would anyone buy a Honda Civic for $23K when they can get a Chevrolet Spark

          • I don't know what you need convincing of? The mere fact that the cheapest vehicles on the market are NOT also the most popular ones is proof enough that cost alone isn't the main deciding factor. People want nice cars and trucks that suit their needs, lifestyles, and self-image, and are willing to pay more for that.

            Even a Honda Civic is not the cheapest new car you can buy. Why would anyone buy a Honda Civic for $23K when they can get a Chevrolet Spark for $14K?

            I think you're right in many respects.

            For

        • Still not convincing me of the affordability issue - electric car makers are raising prices by $5k already for shortages. Insuring a $45k car costs more than a $20K car and taxes on a $45k car will be more than twice than the cheaper car.

          Chevy recently reduced the MSRP of the Bolt, which is a popular model in spite of the recalls... although not as popular as Teslas etc.

  • It's basically the same car as the bZ4X and Solterra was a joint Toyota-Subrau project. This might improve sales of the Subaru.

  • First 200K vehicles per manufacturer? It rewards the laggards who drag their feet who "bank" their credit waiting for the market to warm up and competing tech to shake out. While the risk taking early ones get punished by yanking their credit just when they get going.

    They could have set up a rule like, "first one or X million EVs" or "once one manufacturer ships X units, clock runs for all manufacturers" ...

    Well, don't blame all law makers. Find the ones who came up with this insane rule, and who they w

    • Just make gasoline 20 dollars a gallon. Gas is kept cheap by the US navy ensuring the security of the sea lanes. If the US navy was stood down and only the Coast guard left to patrol US waters, piracy would rise and the cost of ocean transport go up. 20 dollar gas would mean people buy electrics without a tax credit. Bonus you save all the money spent on the Navy. Maybe use that money to build HSR. Second bonus - importing stuff from China becomes expensive giving a boost to local US manufacture.

      Ensuring

      • Re: (Score:2)

        by King_TJ ( 85913 )

        I don't think so... Considering the infrastructure in America is nowhere near ready to accommodate a mass-switching of almost all vehicles on the road to electric, $20/gallon gas would just cripple everything. (At that price for gas, you'd destroy the entire economy. Imagine people paying the required fee to order food via GrubHub or DoorDash with gas prices that high? Amazon Prime would be about $1000 a year to cover the costs of their "free shipping". Inflation would be through the roof on everything so

        • Re: (Score:2)

          by ghoul ( 157158 )
          Ordering from Amazon where items are consolidated in warehouses by customer and then sent out on optimized delivery routes burns less gas than bringing inventory to multiple retail stores and then each family in a neighborhood making an individual shopping trip. So if gas becomes expensive Amazon will get a cost advantage. Retailers will have to raise their prices much more than Amazon will.

          Regarding doordash and grubhub, thats a business that needs to die. Americans eat out way too much. Every house has
  • Toyota's allocation system makes this even worse since they have a set # of vehicles they send out to the various dealerships. **Been waiting on getting a new Toyota for 7 months now.

  • They're rearranging the deck chairs... (Score:3)

    by VeryFluffyBunny ( 5037285 ) on Thursday July 07, 2022 @08:47AM (#62680856)
    ...on the Titanic while it sinks. You can't consume your way out of global heating. Either change how you live & power your lives or suffer the consequences. Mother nature's the ultimate cruel, hard bitch.

  • Toyota got caught by the same thing that hit GM: plugin hybrids. People who buy one qualify for the tax credit - but each plugin hybrid counts toward the phaseout threshold. So if you sell plugins too long or too successfully, you can be left with little time to sell BEVs before the phaseout starts (and ends, as it has for GM and Tesla - neither of which get any tax credit any more, which for GM is probably the main reason why the Bolt's price has been cut so much).

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