My colleague Steve always takes the good stories fast. Steve! This time he beat us all to discuss the proposed law on electric cars. This is cool because he analyzed it very thoroughly and now I do not have to. On the other hand, my experience with dealers shows me that the bill needs some changes if we want it to succeed, because as it is written, it will be an important gift for car dealers and will not help more cars to sell.
For those of you who are not going to read Steve’s article (it’s good, I’m lazy some days too), here’s a brief overview of what the bill will do:
- Eliminate the per producer restriction and give consumers access to the tax credit for the next ten years, regardless of the manufacturer where they buy their car.
- Allow buyers to use the tax credit over a period of five years or apply the credit on the spot to the dealer to lower the price of the vehicle, making the credit more applicable to those without large tax liability.
- The provision of a ten-year extension of tax credits for vehicles with alternative fuels and charging infrastructure to encourage the construction of this important infrastructure across the country.
If you buy an EV today, the credit is not repayable like the earnings credit. So if you owe thousands of dollars to the fund at the end of the year, it does not help you much and may not help you at all. So if you make it a discount on the point of sale, which reduces the outside price by $ 7000, it will help Americans at all income levels to really use it to buy an EV and get lower payments.
Now, to remind you of car dealers, here’s Harry Wormwood from the 1996 movie Matilda:
Anyone who likes money knows that the ‘price’ at the dealer is not what you have to pay unless you buy a Saturn or a Tesla, and that dealers are all from Saturns, as John Nada does not have bubblegum. If you do not step in to negotiate, they will kick your ass.
What dealers will do is start with the MSRP, which is thousands of dollars more than what the car should actually sell for, and then give the federal discount that costs the dealer nothing to give you. It will seem like you are getting a good price, but in reality, the retailer will benefit from almost all the discounts.
If the bill succeeds as proposed, make sure you take full advantage of it by not allowing traders to use it as a scam to deter you. Negotiate based on the actual cost of the merchant (you can find it on Google) and then deduct the $ 7000. Start your negotiations there, and pay no more than about $ 2000 for it. You may have to walk out and go to several retailers to get the price.
Now, CleanTechnica readers know how not to get rid of their own tax credit, but there is no way we can tell the whole country how not to be taken by the traders, so if we accept the proposals, we give the traders a great a gift, while not reducing the cost of an EV much. So a lot of taxpayers’ money will be wasted.
To change this, we need to tighten the rules for tax credit a bit.
How to resolve this bill
In order for this bill to really promote a lot of stage sales, we need to do things to make sure it has an impact and encourage consumers as well as dealership staff (especially sellers) to sell you an electric car.
First, we need to set a merchant cost limit for transactions that are eligible for the point of sale rebate. Charge the customer a dollar more than the allowable amount, and you can not get the federal money to cover the sale. Traders do we need to be able to make a profit on every sale, so we can not set it at merchant cost, but there needs to be a reasonable limit to ensure that the program is not just a gift to them. We can set it at $ 2500 against the actual dealer cost (including setbacks and other things they can play with), or set it as a percentage of sales. This will result in merchants making money while the program becomes nothing more than a gift to them.
We also need to think about the salesperson. If they think they can make a better commission for a gas car, they will push customers to buy the car. It’s all about making money, and we’re ignoring it because of the program’s danger. To fix this, we need to do what’s called ‘Spiff’. Give the salesperson $ 300-500 in cash for each EV sold. Do so, and they will be sure that all the EVs have been sold in the lot before considering selling a petrol-powered car to a customer. Even then, they will tell them please, please come back next week. “I have the perfect car for you to come in on Tuesday!”
Although we are reducing the price of vehicles by 7 thousand, we need even more infrastructure. We need every retailer in every little town to put in charging stations. To do this, we can allow dealers who offer a fast charger to sell their cars for a little more. For any months that they have a DC-fast charger available to the public 24/7, they can sell the EVs for $ 500-1,000 more. Only a few sales cover the cost of the demand money and help cover the cost of the equipment.
The station must be in operation. This can be enforced with a required sticker on the charger / plug with a number where users can report that the charger is off. If they do not fix it as soon as possible, they will lose that part of the sales pie that month.
If we want it to have a chance of passing the Senate, we must make sure that it is not a “tax credit for the rich.” If we put a limit on the price of the vehicle, we can not use it for expensive cars. This will encourage manufacturers to offer motor vehicles that the average person can afford and not keep themselves on luxury sports utility vehicles while offering nothing within the reach of most people.
If we can do all these things, the program will be a great success. If we do not do this, we are just wasting money.
Suggested Image: The American Capitol Building, by the American architect of the Capitol (public domain)
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