EV law, tax, rebate info (2)

[joshua-rosen]

The IRA is explicit, it has to have four wheels

(2) Motor vehicle

The term “motor vehicle” means any vehicle which is manufactured primarily for use on public streets, roads, and highways (not including a vehicle operated exclusively on a rail or rails) and which has at least 4 wheels.

• This reply was modified 8 months, 3 weeks ago by  Joshua Rosen.
• This reply was modified 8 months, 3 weeks ago by  Gabriel Kemeny.
• This reply was modified 8 months ago by  Gabriel Kemeny.

[dan-stevens]

On a lease, it is a commercial vehicle, not personal. The IRA is explicit for personal vehicles it has to have 4 wheels, but I challenge you to find the same requirement for commercial clean air vehicle credit.

Let me give some references to get you started in your research:
https://www.irs.gov/pub/irs-drop/n-23-09.pdf
which states:
For purposes of § 38, § 45W(a) allows a taxpayer a § 45W credit for the
purchase of each qualified commercial clean vehicle, as defined in § 45W(c), placed in
service by the taxpayer during the taxable year.

Then you look up 45W(c) and get blurry eyed reading it, but…. it doesn’t mention anywhere that I can find a requirement for 4 wheels.
Reality is though, I don’t think 45W(c) is fully written yet and it can be changed. You can find the request for comments on it at:
I.R.C. § 45W(c)(1)

The issue here is, while the personal credit is legislative text, meaning it pretty much should be followed, the commercial credit is more of a – Hey IRS, go figure it out! which means it can be changed on a whim as well.

Bottom line though is that the commercial credit has similarities to the personal credit, but is not even close to the same thing. Don’t get them confused.

[Qiang]

@Dan Stevens

I hope and I think you may be right. I read through your IRS link. It states that “A qualified commercial clean vehicle under § 45W(c) includes (1) a vehicle that is
treated as a motor vehicle for purposes of title II of the Clean Air Act…”. I then went to EPA’s Clean Air Act title II where “clean fuel vehicle” is defined (link below). Nowhere in EPA’s definition that four-wheel is mentioned.

https://www.govinfo.gov/content/pkg/USCODE-2013-title42/html/USCODE-2013-title42-chap85-subchapII-partC-sec7581.htm

Aptera should get a definitive opinion from IRS.

I am not clear whether this commercial tax credit is available to Aptera if we lease from Aptera, or the buyer of the vehicle has to be a business entity.

[dan-stevens]

The buyer of the vehicle is the leasing company, which is a business. They get the credit (if eligible). They may choose to pass that on to you on the lease in the form of something like a cap reduction, effectively lowering your payments.

They may only pass part of it on.

They may keep it for themselves.

Personally, since I own a business, I’ll just buy mine for the business and take the credit directly. Case solved for me (pending a lot of clarity yet to come).

The bigger problem here is Aptera will need to find a finance company willing to lease the vehicle to customers. Most won’t, its to much of an unknown. There are ways to make this happen, but Aptera may not have the resources to do it. Not sure its a super big risk for them, but you never know.

[raymond-nettleton]

Many states are looking at mile based taxes for EVs as they should. I have always thought we should pay by the ton mile or Kg Km. 9000 lb EV Hummers can’t be good for the roads and they don’t pay fuel taxes. So a 1800 lb Aptera would pay 20% of a 9000 lb EV Hummer on a mile of use basis. Some kind of anonymous transponder system would be ideal so we get an annual bill based off estimated mileage with some verification by the vehicle/transponder.

Trying to avoid the progressive vs regressive tax argument I have always thought the tax structure should favor the environment or doing the best thing. Charging more for heavy vehicles is a good thing which will drive manufacturers to make lighter more efficient vehicles.

Anybody aware of pending tax policy that would apply differently to an autocycle vs a standard EV?

[kerbe2705]

@RAYMOND NETTLETON Currently, in Mississippi, EVs pay an additional annual tax of $160 – but the rate is keyed to inflation (it was $150 last year). Hybrids, Electric Motorcycles and Autocycles pay half that amount ($80). The State Legislature is also looking at taxing NEVs and electric bicycles and there is a proposal to tack an additional $3.50 fee onto every connection to a public charging station.

[Jonathan]

Here in Michigan, electric vehicles pay a much higher registration fee (about double). The simplistic reasoning is about “fairness” in taxation. It goes something like, “Hey they aren’t paying the gas tax which we use to fix roads, so they have to make it up to pay their fair share!”

Besides not accounting for actual wear and tear on the roads (weight of vehicle, car efficiency, unregistered farm vehicle use), the argument, and therefore tax policy, is flawed for several reasons.

1. States are not actually losing any revenue.

Car manufacturers must comply with the federal Corporate Average Fuel Economy, or CAFE standards ie. their entire line of vehicles must meet a federal minimum standard for average miles/gallon of fossil fuel. Manufacturers are allowed to average EV’s into their compliance data. (Which calculate out to a hundred MPG or higher). This raises their compliance data. They can they can then build more trucks, SUVs, and muscle cars than if the EVs weren’t figured in. Those gas hogs wouldn’t be manufactured and sold if EVs weren’t part of the CAFE standard, so the state still taxes the same number of gallons.

2. A state must spend tax dollars to control floods, fires, and storm cleanup due to excessive carbon in the atmosphere. EVs contribute much less carbon, reducing the state’s expenses.

3. Health problems caused by air pollutants affect costs to the state. EVs are pretty low polluters.

4,5,6. National security, famine, oils spills. We could keep going.

[thomas-edmonds]

How soon could Aptera see infrastructure bill funding?

[Shawsp]

It looks like the Aptera would qualify for California rebates if it registers/qualifies. But the company needs to apply to be a part of the programs. Otherwise those of us in CA who might qualify won’t be able to do it.

California Clean Vehicle Assistance Program:

Home

California Clean Vehicle Rebate Program

https://cleanvehiclerebate.org/en

https://cleanvehiclerebate.org/en/dealer/overview

Does anyone know of other states that offer similar programs?

[harry-parker]

My current state, New Jersey, offers up to $4000 off for EV’s, but they don’t allow motorcycles or 3 wheeled vehicles to participate. 🙄

[Jeff]

Looks like Illinois is offering $1500 rebates for electric motorcycles.

https://epa.illinois.gov/topics/ceja.html

Maybe a 3-wheeler would qualify, but there’s nothing that explicitly addresses that question that I could find.

[craig-merrow]

I asked Efficiency Maine about Aptera awhile back; they had some positive indications about their $2000 EV rebate for Aptera, but were still watching how things unfold with it.

[chris-hale]

Bad news for electric vehicles in Texas, good news for Aptera. I live here in Texas and our government thought it best to excessively tax electric vehicles under the guise of electric vehicles not contributing to the funding of the roads here in Texas. Everyone knows that there are taxes added to gas. Here in Texas it is 18 cents per gallon for state tax and 20 cents per gallon for federal tax. The average person pays about 135 dollars in taxes depending on the amount of gas they buy. Texas just passed a law that new electric vehicles will have an initial registration fee of 400 dollars and then 200 dollars annually no matter how far you drive. That is pretty excessive in my opinion. So here is the good news. The only electric vehicles that are being taxed are of the four-wheel type. Electric motorcycles, and autocycles are exempt. So buy an Aptera instead of a Tesla, or other brand and you are saving yourself a WHOLE lot of money. At least if you live in Texas. So, score 1 for Aptera. So spread the word that Aptera is now even a better buy here in Texas. Can’t wait for mine to arrive.

[D2E]

In North Carolina there is talk of changing to road usage tax instead of gas tax. Each time the vehicle is inspected, the mileage for the year is recorded and generates a bill.

[craig-merrow]

Wow, it’s almost like they are trying to dissuade people from buying an EV. I recall an article where Wyoming had a bill to ban the sales of EV’s by 2035 in response to other states that want to ban the sales of new ICE vehicles by 2035. Hopefully that one didn’t go very far.

[Wildman]

Texas… I live there and am glad that when I get my Aptera, I will be exempt from those fees 🙂

• This reply was modified 4 months, 1 week ago by  Morris Wilder.

[kerbe2705]

Thanks to Elio, here in MS we have an “autocycle” designation and it’s been decided that all Hybrids, E-autocycles and E-motorcycles will pay an annual “EV penalty road tax” at half the rate of all other EVs. Only electric bicycles are exempt. The tax rate is tied to something that rises every year and this past year it was $180 for EV cars & trucks, $90 for all other e-vehicles.

[Pragmatic_to_a_Fault]

I don’t think it’s excessive at all, typical EVs weigh more than an ice car of comparable size , thus damaging the roadways , they don’t pay for gas so you lose the gas tax revenue that goes to repairing the highways and surface streets.

[Greek]

States are now creating a new revenue stream beyond the replacement of their gasoline taxes. The highest taxing states for electrified vehicles seems to coincide with the red states. This will ultimately make it harder for individual who would like to purchase a battery powered vehicle to reconsider something that will cost them less, plus further delaying the electrification of our country. This is not saying that blue states aren’t also levying higher registration fees, but some states are clearly focusing on an agenda beyond what is needed to replace highway and road repair funds. Texas has now become TAXas….a $400 fee that is imposed with the purchase of a brand new electric vehicle. Any state that imposes their will on the purchasing power of an individual should be recognized and shown that the public is paying attention.

• This reply was modified 3 months, 4 weeks ago by  bbelcamino.
• This reply was modified 3 months, 3 weeks ago by  Gabriel Kemeny.

[ROMAD]

Years ago, California did something similar to those who owned Federal Emissions Standard vehicles and then later moved to the state. California imposed a punitive fee when registering those vehicles to compensate for their “excessive” emissions. It took years but the fee was finally declared unconstitutional.

[len]

I got in, under the wire, for our first EV here in AZ:

https://azdot.gov/news/vehicle-license-tax-formula-alternative-fuel-cars-changing-2022

So YES there are EV adoption pains😞

[ROMAD]

But that isn’t a punitive fee; just parity for basic registration which goes down as the vehicle gets older. Adding an extra multi-hundred dollar fee over the registration fee would be punitive.

[shane-swick]

I read that the new Texas law excludes motorcycles and “autocycles”. So, for now, doesn’t this mean Aptera is exempt from most states from these extra taxes and fees?

[joshua-rosen]

I thought Texas didn’t have an autocycle law, the Aptera is a motorcycle which means you need a motorcycle license and maybe have to helmet. The other two states in that situation are Massachusetts and Alaska.

[john-malcom]

Not surprising that TX would do this as it is the poster child for an oil state (STRONG and well financed lobbying). This legislation was drafted and passed by legislators elected by TX voters and signed off by the TX governor also an elected official so I think represents the perspective of the majority of TX voters.

SB449 (May 22, 2015)has been amended to require wearing a helmet for autocycles. SB449 establishs autocycles as a separate category from motor cycles. However an autocycle in TX is registered as a motor cycle. Only a Class C license is required to drive an atocycle (No motorcycle endorsement)

[scott-ullerich]

Article on this states that it could include any vehicle with less than four wheels, which would put the Aptera in play.

Electric Motorcycle Tax Credits: Two Senators Try To Expand Program In US (rideapart.com)

Fingers crossed.

[bruce-mengler]

Electric Motorcycle Parity Act (senate.gov)

[Tom]

Also, this: https://www.baldwin.senate.gov/news/press-releases/baldwin-casey-introduce-legislation-to-extend-tax-credits-to-electric-motorcycles

[Waiting]

This is great news.

Unfortunately, both Senators are Democrats. The House will block it, if only for that reason.

[Greek]

The one positive name attached to that bill is Harley Davidson, which sees the writing on the wall. Ice riding Harley patriots are shrinking, young people no longer are interested in that era of motorcycles. Overall ownership of motorcycles is shrinking, younger generations are not interested in riding bikes as they are now. Electric motorcycles is a newer trend with a growing market. Still not sure if it will bring back ridership numbers, but ice motorcyclists overall are declining.

[curtis-cibinel]

I cant see this happening as presented even when democrats get control of the house since it basically makes very low cost motorcycles almost free. They probably needs a cap as something like 30% of the vehicle price. Aptera getting a decent tax credit (they won’t get the mineral part) would be huge for the argument for Aptera based on pure economics. I still want Aptera mostly as a unique EV sports car but this market segment is a very small percentage of reservation holders (based on facebook polls a few months ago).

[craig-merrow]

I agree that it would work better as a percentage of the price rather than a set amount. Would be nice if it could be spun to benefit new manufacturers trying to get off the ground such as Aptera. Unfortunately, there’s too much hate and discontent in our government to see the positive outcomes, so it probably doesn’t have much of a chance, but there’s always hope!