Toyota Runs Out of US Tax Credits for EVs - Bloomberg.com: 07/01/2022

Discussion in 'Prime Main Forum (2017-Current)' started by prius16, Jul 1, 2022.

  1. prius16

    prius16 Active Member

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    According to Bloomberg.com, as of last quarter, Toyota sold more than 200,000 EVs, in total over the years.


    Therefore, for the Prius Prime, the Federal Tax Credit will be:

    $4,502 for cars bought and ?delivered? until September 30th 2022.

    $2,251 for cars bought and ?delivered? between October 1st 2022, until March 31st 2023.

    $1,126 for cars bought and ?delivered? between April 1st, until September 30th 2023.


    From a Federal Tax Consideration, the date is likely the "placed in service" date.
    ?Therefore, that might be the official delivery date?

    Note: The official State-consider "placed in service" date may differ from State to State.
    That may be different from what the tax Federal "placed in service" date.

    Note, for people right on the cusp of a date, I suggest that you consult a tax attorney.
    I am not a tax specialist, nor an attorney.
    I'm a geek researcher/engineer. (y)


    Fwiw, some links:
    Code:
    Qualified Plug-In Electric Drive Motor Vehicles (IRC 30D)
    https://www.irs.gov/businesses/irc-30d-new-qualified-plug-in-electric-drive-motor-vehicle-credit
    
    
    IRC Section 30D(g) Qualified 2- or 3-Wheeled Plug-In Electric Drive Motor Vehicles
    https://www.irs.gov/businesses/irc-section-30dg-qualified-2-or-3-wheeled-plug-in-electric-drive-motor-vehicles
    Excerpt: (note, out dated)
    Internal Revenue Code Section 30D(g) currently provides a credit for qualified 2-wheeled plug-in electric vehicles. The amount of the credit is 10 percent of the cost of any qualified 2-wheeled plug-in electric vehicle placed in service by the taxpayer during the taxable year and cannot exceed $2,500.
    
    
    Qualified Plug-in Electric Drive Motor Vehicle Credit
    https://www.irs.gov/pub/irs-pdf/f8936.pdf
    Excerpt:
    Line3 Enter date vehicle was placed in service (MM/DD/YYYY)
    
    
    Instructions for Form 8936 (01/2022)
    https://www.irs.gov/instructions/i8936
    Excerpt: (note, out dated)
    Credit for two-wheeled vehicles. The credit for qualified two-wheeled plug-in electric vehicles expired for vehicles acquired after 2021. However, if you acquired the two-wheeled vehicle in 2021, but placed it in service during 2022, you may still be able to claim the credit for 2022. Do not report two-wheeled vehicles acquired after 2021 on Form 8936 unless the credit is extended.
    
    
    https://www.investopedia.com/terms/p/placed-in-service.asp
    Excerpts:
    ===========
    According to the Internal Revenue Service (IRS) Reg. Sec. 1.167(a)-(11)(e)(1), property is considered to be placed in service when it is "first placed in a condition or state of readiness and availability for a specifically assigned function." This may or may not coincide with the purchase date of a depreciable asset, depending on how a company interprets "state of readiness and availability." IRS's Reg. Sec. 1.46-3(d)(1)(ii) applies the same criterion as the above regulation for the purpose of an investment tax credit for the purchase of property.
    ...
    If an asset is purchased and stored in a warehouse, but still needs to be fixed before use, the IRS will not consider it placed-in-service. The company thus will not be allowed to take depreciation charges to lower pretax income. Only when the asset is "placed in a state of readiness and availability for a specifically assigned function" will the IRS allow depreciation to commence. Buildings are usually considered placed-in-service when a certificate of occupancy is issued. However, there have been numerous disputes between companies and the IRS over the exact interpretation of the placed-in-service language.
    ===========
    


    From:
    Code:
    https://www.bloomberg.com/news/articles/2022-07-01/toyota-runs-out-of-us-tax-credits-for-evs-joining-tesla-and-gm
    Toyota Runs Out of US Tax Credits for Electric Cars, Joining Tesla and GM - Bloomberg

    =========
    Toyota Runs Out of US Tax Credits for EVs, Joining Tesla and GM
    Automaker has crossed 200,000-car cap on $7,500 subsidy
    July 1, 2022

    Toyota Motor Corp. has used up a key US tax credit for hybrid and electric vehicles, a milestone that the automaker says will raise its costs and hinder adoption of climate-friendly cars.

    The company said Friday that it sold 3,876 plug-in hybrid and electric cars in June. The US allows automakers to offer a $7,500 tax credit to buyers of fully or partly electric cars, but only up to 200,000 per company. Toyota’s cumulative sales of eligible vehicles have now surpassed that threshold, according to data compiled by Bloomberg and confirmed with the company.

    The Japanese manufacturer becomes the third automaker to hit the limit, joining General Motors Co. and Tesla Inc. Demand for hybrid and electric vehicles has steadily grown in the US, especially as gasoline prices surge above $5 a gallon in some states.

    Toyota and its rivals have lobbied Congress for an extension of the tax credits, but they disagree on who should be eligible. Toyota and Tesla oppose a proposal by the Biden administration to offer an additional $4,500 in credits to unionized carmakers, a position favored by GM, Ford Motor Co. and Stellantis NV.

    Absent Congressional action, Toyota’s credits will gradually be reduced over a one-year period once the Internal Revenue Service determines the cap has been reached. The credits will be halved twice over 12 months before running out entirely.
    =========


    .
     
    #1 prius16, Jul 1, 2022
    Last edited: Jul 2, 2022
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  2. bisco

    bisco cookie crumbler

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    toyota has the ability to reduce the prime price to compensate for lost incentives, if they can ever make enough primes again.
    their new bev could be hurt though, if it ever is available
     
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  3. schja01

    schja01 One of very few in Chicagoland

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    To my untrained eye there seems to be a gap in your dates. Might June 1st really be April 1st?
     
  4. Leadfoot J. McCoalroller

    Leadfoot J. McCoalroller Senior Member

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    I'm calling moosepuckey right there.

    Toyota's production cost won't change a penny.

    Apart from that, I congratulate them on reaching a major sales milestone.
     
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  5. wjtracy

    wjtracy Senior Member

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    Color me confused, but apparently we have until end-Sept-2022? to get the full tax credit for RAV4 or Prius Prime, and the new BEV. I had been assuming end-June was the deadline if the sales reached 200k.
     
  6. john1701a

    john1701a Prius Guru

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    The quarter to follow expiration is the unlimited period. Tesla exploited that, shipping as many as possible during that time to take advantage of the quantity restriction lift. GM completely wasted the opportunity. Toyota is stuck with a chip shortage. So even with delivery catch up from the recall prior to quarter-end, there shouldn't be an expectation of volume increase. Though, 2700 for bZ4X and 2600 for Solterra produced roughly during the prior 3 months isn't too bad. More of the same might be possible. Who knows, maybe that partnership with CATL will result in a steady flow of cells for us.
     
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  7. citiprius

    citiprius Active Member

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    If you could get one :(
     
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  8. Gokhan

    Gokhan Senior Member

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    It doesn't matter when the car is delivered to you. What matters is the date on the registration, which should usually be the same as the date on the purchase contract.
     
  9. prius16

    prius16 Active Member

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    Thanks for catching the typo! (y)
    While I still could, I updated the original post.


    While I still could, I updated the original post, and added a number of links.
    From a Federal Tax Consideration, the date is likely the "placed in service" date.
    Therefore, that might be the official delivery date?
    Note, for people right on the cusp of a date, I suggest that you consult a tax attorney. :)
    Note: I am not a tax specialist, nor an attorney. I'm a geek researcher/engineer. (y)

    For me, my registration and delivery date are the same. However, that's because of a lot of hustle by many people - especially my salesperson.
    I "could have" picked up the car ~~1-7+ days after the car was registered. It depends on the dealership, and any arraignments/agreements.

    For my car, for the ?dealership? to consider the car to be officially delivered, I had to drive the car off the lot (more specifically, the car had to taken off the dealership's lot), and the car had to remain off the dealership lot for at least one night.
    My guess is that it's because of some State law(s), and some precedents concerning what constitutes an "official delivery" of a vehicle?


    The purchase and sales date can be different than the registration date.
    Toyota mails the paper "Certificate Of Origins" to the dealership, separately from the delivery of the actual vehicle.
    The "Certificate Of Origin" for a specific vehicle may arrive at the dealership before, same day, or many days later(like it did for my car).

    For many States, a "Certificate Of Origin" is required to register a new vehicle. Like in Mass.
    For many States (but not all, e.g. Michigan), insurance is required to register a new vehicle. Like in Mass.
    In many States, the insurance company will require a "Certificate Of Origin" for a new vehicle, before the insurance company will issue the official paperwork/forms for the DMV/RMV/what-ever. Like in Mass.

    My car arrived on the dealership lot on Thursday 4/28/2022.
    I paid and finalized the paperwork and sale on that date.
    However, the Certificate Of Origin(from Toyota) didn't arrive by mail, at the dealership, until Monday afternoon 05/02/2022. That was also the last day of the Toyota $1,500 cash back. I doubt that it mattered in my case. Still, if I didn't have to, I didn't want to take any chances. :)
    My awesome salesperson "made things happen", and I was able to pick up the car at 5pm that day. (y)

    .
     
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  10. Rmay635703

    Rmay635703 Senior Member

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    Funny how when Toyota runs out only then do we get a Manonions tax credit proposal to reauthorize (maybe Ford was going to run out soon as well?)

    Schumer-Manchin reconciliation bill has $369 billion to fight climate change — here are the details

    Lots more limitations and not clear how a low income individual will be allowed to use the $7500 credit

    Also like the following SIC

    • For individuals, a $7,500 tax credit to buy new electric vehicles and a $4,000 credit for buying a new one. Both credits would only be available to lower and middle income consumers.
     
    #10 Rmay635703, Jul 28, 2022
    Last edited: Jul 28, 2022
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  11. Salamander_King

    Salamander_King Senior Member

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    Yeah, I have to dig deeper to find out about what was agreed on in the new bills if it becomes law. Even if the new tax credit for a BEV purchase is included in the bill that will be applicable to Toyota and other makers with the expired current tax credits, it seems likely that the new law will not start until next year. That makes purchasing Toyota BEV this year, not a good idea. That is of course if bZ4X really reaches the market before the end of this year. But depending on the language of the new bill, PHEVs like PP or Rav4Prime may get full credit only from the current code before the phase-out. Yeah, I think I'd rather wait to see if the GMs Bolt will be available in 2023 with renewed $7500 credit.
     
  12. Marine Ray

    Marine Ray Senior Member

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    There's a lot to unpack in this proposed bill. One thing for Toyota is vehicles need to be made in North America.
     
  13. Salamander_King

    Salamander_King Senior Member

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  14. Washingtonian

    Washingtonian Senior Member

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    I think I read that the $4000. credit was for a used one.
     
  15. wjtracy

    wjtracy Senior Member

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    What Toyota Plug-ins are made in NA? RAV4P in Canada just over the border?
     
  16. Salamander_King

    Salamander_King Senior Member

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    No Toyota EVs (bZ4X, Prius Prime, Rav4 Prime) are made in the NA. So, if the new code becomes as proposed now, Toyota vehicles will not qualify for any incentives from US.gov.
     
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  17. wjtracy

    wjtracy Senior Member

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    Weird that Toyota USA was pushing Congress for EV incentives, only to be shut out. But we'll see where the final rules end up. But the handwriting has been on the wall, even the defunct earlier versions of the plan were all slanted to favor US Autos with the largest tax credits.
     
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  18. Trollbait

    Trollbait It's a D&D thing

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    I'm not heartbroken. Other foreign brands were planning EV factories in NA before even the earlier version of the credit. No one told Toyota that they couldn't do the same. The current incentive awarded the companies that delayed entering the plug in market; it actually punished the companies that took the initiative to start the market segment. The proposed one awards the ones that took the initiative to build their plug ins here. I think it's a big improvement. With the dropping of the union requirement, and increased NA content over the previous proposal being an improvement there.

    The first draft of the current credits excluded the PiP. Toyota got that changed, and they still might get changes made to this bill. If not, any bets on how long it takes them to start assembling Rav4 Primes in NA?
     
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  19. Gokhan

    Gokhan Senior Member

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  20. fuzzy1

    fuzzy1 Senior Member

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