IRC 30D phase-out

Does anyone know when the IRS 30D phase-out will happen (200,000 plug-ins sold by Toyota)? IT was expected to happen in early 2022, but the chip shortage has delayed it. With Manchin killing the Democrat green initiatives, I think the days of the federal tax credit are numbered and it could happen sometime in 2022. I am then worried if I trade in my car now, I will be stuck with a color choice I don't like for many years.

 

Here is some data.

Q2 2020 cumulative: 127,593

Q3 2020: ~ 4,962
Q4 2020: ~ 7,000 (estimated)
Q1 2021: 9,791
Q2 2021: 18,738
Q3 2021: 13,844

Q3 2021 cumulative: ~ 181,928

So, if there were no chip shortage, IRS 30D would have started phasing out on October 1, 2021 (after Q3 2021) for Toyota. It will now start on April 1, 2022 (after Q1 2022).

This will what happen if you buy a Prius Prime on or after April 1, 2022 (after Q1 2022):

The new qualified plug-in electric drive motor vehicle credit phases out for a manufacturer’s vehicles over the one-year period beginning with the second calendar quarter after the calendar quarter in which at least 200,000 qualifying vehicles manufactured by that manufacturer have been sold for use in the United States (determined on a cumulative basis for sales after December 31, 2009) (“phase-out period”). Qualifying vehicles manufactured by that manufacturer are eligible for 50 percent of the credit ($2,251 for Prius Prime) if acquired in the first two quarters of the phase-out period (April 1, 2022–September 30, 2022) and 25 percent of the credit ($1,126 for Prius Prime) if acquired in the third or fourth quarter of the phase-out period (October 1, 2022–March 31, 2023). Vehicles manufactured by that manufacturer are not eligible for a credit if acquired after the phase-out period (on or after April 1, 2023).

The new EV bill that was killed by Manchin did not have a credit for plug-ins with over 2.5-gallon gasoline tanks. Therefore, if I trade in my 2021 Prius Prime Limited Blue Magnetism, I will be stuck with the Titanium Glow that I don't like for many years.

 

Even if Manchin hadn't killed the bill, I see that there was a 2.5-gallon gasoline-tank limit on the plug-in hybrids in the new bill. Therefore, Manchin or no Manchin, the Prius Prime tax credit is starting to phase out after March 31, 2022. If the chip shortage really halts the production, the full $4,502 could last until June 30, 2022.

 

Yes, November 18, 2020.

 

I probably won't do it because I feel like if I buy a color that I don't like, it will be cursed. I am getting a lot less bullied with the Blue Magnetism than I was with the Classic Silver Metallic, and the Titanium Glow is similar to that. Besides, there is no more tax credit after this one, and I will be stuck with a color that I don't like for many years. I would certainly do it if they had a Limited Blue Magnetism, but they virtually never had one. I should have ordered one months ago.

Also, the tax credit is not really saving you money if you trade in, but it is letting your borrow money at low interest, meaning, I am not making real money by the trade-in but obtaining some useful cash, which could be invested in a good index ETF. When it is gone, you will then actually lose money around $6,000 when you trade in.

 

No, the only California state incentive remaining on the Prius Prime right now is a meek $450.05.

Eligible Electric Cars | California Clean Fuel Reward

 

Inside EVs.

 

You typically lose about $1,000 in a year if you trade in with the tax credit. Without it, it would be like $6,000.

 

In either case, the bill seems to be dead thanks to Manchin. However, you never know.