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 2 months, 2 weeks ago by  Joshua Rosen.
• This reply was modified 2 months, 2 weeks ago by  Gabriel Kemeny.
• This reply was modified 1 month, 3 weeks 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. 🙄

[IA-1]

Yes, too bad Aptera is not qualified for any incentives, I hope this will change in a near future.

The Bolt EV starts at $26,595, similar to the Aptera’s price of $25,900, but with the incentives of $7,500+$4,000 it comes to only $15,095, which is an unbelievable deal.

A lot of people will think twice before deciding which vehicle to get.

[Greek]

In my area, trying to buy a Bolt is a rip-off experience. Dealers are up charging $5k and more for the privilege of purchasing. Not many dealers are allotted vehicles and those who are are taking full advantage. Include the fact that Chevy is only producing them in limited numbers.

I expect the same thing to happen with the new Equinox and Blazer that will also be out soon. Until the production can come close to equaling demand, price gauging will take place for a while. APTERA needs to be in production by early next year, it can’t compete with the incentives, but with demand being so hi it will definitely become an alternative for many and will provide an opening in the market for success.

[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.

[lance-doyle]

Thanks for posting this. I just sent a letter to the IRs.