What is the State of Hybrid/Electric Cars and the Federal Tax Credit?

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CoastLawyer2030
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What is the State of Hybrid/Electric Cars and the Federal Tax Credit?

Post by CoastLawyer2030 »

My wife's Toyota Rav4 is now ten years old and has 150,000 miles. We are keeping it for as long as it rides, but we have been looking at cars so she has a general idea of what to get when her Rav4 finally calls it a day.

First, I am surprised to see so many electric car options. We have not been in the market for a car in a long time, and it's impressive how many electric cars there are. Toyota seems to have a hybrid of every one of their models. Same with Honda. The reviews seem to indicate good performance with really impressive gas mileage.

But, when I look at the list of eligible vehicles for the federal tax credit, I am completely baffled as to why such a small amount of cars are on the eligible list. Basically no Hondas are eligible. The only eligible Toyotas are the Prius and Rav4 Prime.

Why is this? Will more vehicles be eligible soon?

Should we be holding out until, say, 2025 to dip our toe into the electric/hybrid car waters?
psteinx
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Re: What is the State of Hybrid/Electric Cars and the Federal Tax Credit?

Post by psteinx »

I think you're conflating two variations on electric technology:

1) Hybrid (conventional, as first popularized by the Prius)
This is an internal combustion engine, paired with a battery system that generates when you brake, boosting MPG. The batteries are small-ish, and you don't plug them in.

2) Plug-in Hybrid
Like the above, but usually with a bigger battery (for 25+ miles of battery only driving), that you can plug in to charge at home.

Then, there's a third:
3) Straight electric
No internal combustion at all - only a (bigger) battery, that gets you from 70-350 miles on a charge. Examplars include Teslas and Nissan Leafs

===

Toyota is big on option 1, but not so big on 2 or 3. Most manufacturers have plans to roll out more of option 3, in the next few years. I think that the federal tax credit applies to 2 or 3, but not 1, and only up to a certain sales threshold, per manufacturer. Tesla has used all of their threshold up, so there's, I think, no credit for Teslas now.

Of course, there are other things that affect the net price and usability of the different electric car options, including current car shortages (and thus higher prices), possibilities for better models, made more efficiently in the years to come (driving down the price of electrics), and potentially better charging options (increasing the useability of pure electrics - category 3 above.
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lthenderson
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Re: What is the State of Hybrid/Electric Cars and the Federal Tax Credit?

Post by lthenderson »

After a manufacturer sells 200,000 units, tax credits begin to phase out which might be what you are seeing.
mervinj7
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Re: What is the State of Hybrid/Electric Cars and the Federal Tax Credit?

Post by mervinj7 »

CoastLawyer2030 wrote: Thu Jan 20, 2022 11:37 am
But, when I look at the list of eligible vehicles for the federal tax credit, I am completely baffled as to why such a small amount of cars are on the eligible list. Basically no Hondas are eligible. The only eligible Toyotas are the Prius and Rav4 Prime.

Why is this? Will more vehicles be eligible soon?
I have electric cars for a few years now, so I don't personally see a reason to wait till 2025.
As far as Toyota is concerned, there are quite openly anti-EV and strongly prefer to promote their existing hybrid platform.

https://chargedevs.com/newswire/toyota- ... t-for-evs/
Valuethinker
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Re: What is the State of Hybrid/Electric Cars and the Federal Tax Credit?

Post by Valuethinker »

CoastLawyer2030 wrote: Thu Jan 20, 2022 11:37 am My wife's Toyota Rav4 is now ten years old and has 150,000 miles. We are keeping it for as long as it rides, but we have been looking at cars so she has a general idea of what to get when her Rav4 finally calls it a day.

First, I am surprised to see so many electric car options. We have not been in the market for a car in a long time, and it's impressive how many electric cars there are. Toyota seems to have a hybrid of every one of their models. Same with Honda. The reviews seem to indicate good performance with really impressive gas mileage.

But, when I look at the list of eligible vehicles for the federal tax credit, I am completely baffled as to why such a small amount of cars are on the eligible list. Basically no Hondas are eligible. The only eligible Toyotas are the Prius and Rav4 Prime.

Why is this? Will more vehicles be eligible soon?

Should we be holding out until, say, 2025 to dip our toe into the electric/hybrid car waters?
Apologies if this is irrelevant.

But my understanding is that in places with High Occupancy Vehicle lanes, only 100% electric vehicles now qualify for eligibility. That, alone, would tip me if I lived in a high traffic congestion area.

Right now, a Plug In Hybrid Electric Vehicle may make sense, particularly for those whose regular commute is relatively short. They have small battery packs so there could be a need to charge at work, as well.

However a PHEV is also an unhappy compromise with a small battery pack. It's the pure EVs that give the big improvements in mileage and pollution. Also mechanical simplicity.

It's reached the point where I saw not one but two Teslas in succession taking the turn at the local intersection-- that would not have happened even 2 years ago in my neck of the woods (London, England). Tesla was the 2nd highest selling car in 2021 in the UK, beating the likes of Jaguar Land Rover. So by value, way in the top. A Tesla here probably costs in pounds about what it does in dollars in USA (so say multiply your prices by 1.3x).

Every major manufacturer will have a full range of EVs, fairly shortly. I like the look of the Mercedes one, a lot. But those are traditionally expensive to repair and high depreciation (in North America) so may not be appropriate.

EVs will cost more up front than comparable Internal Combustion Engine cars. They should make that back over their lifetime in lower fuel costs & lower repair expenses. Tesla seems to be way out in front in things like supercharger network (aka "the safety blanket"). See threads here. However build quality is poor, customer service is very poor - at least from all reports. People love their Teslas.
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CoastLawyer2030
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Re: What is the State of Hybrid/Electric Cars and the Federal Tax Credit?

Post by CoastLawyer2030 »

Valuethinker wrote: Fri Jan 21, 2022 6:58 am
CoastLawyer2030 wrote: Thu Jan 20, 2022 11:37 am My wife's Toyota Rav4 is now ten years old and has 150,000 miles. We are keeping it for as long as it rides, but we have been looking at cars so she has a general idea of what to get when her Rav4 finally calls it a day.

First, I am surprised to see so many electric car options. We have not been in the market for a car in a long time, and it's impressive how many electric cars there are. Toyota seems to have a hybrid of every one of their models. Same with Honda. The reviews seem to indicate good performance with really impressive gas mileage.

But, when I look at the list of eligible vehicles for the federal tax credit, I am completely baffled as to why such a small amount of cars are on the eligible list. Basically no Hondas are eligible. The only eligible Toyotas are the Prius and Rav4 Prime.

Why is this? Will more vehicles be eligible soon?

Should we be holding out until, say, 2025 to dip our toe into the electric/hybrid car waters?
Apologies if this is irrelevant.

But my understanding is that in places with High Occupancy Vehicle lanes, only 100% electric vehicles now qualify for eligibility. That, alone, would tip me if I lived in a high traffic congestion area.

Right now, a Plug In Hybrid Electric Vehicle may make sense, particularly for those whose regular commute is relatively short. They have small battery packs so there could be a need to charge at work, as well.

However a PHEV is also an unhappy compromise with a small battery pack. It's the pure EVs that give the big improvements in mileage and pollution. Also mechanical simplicity.

It's reached the point where I saw not one but two Teslas in succession taking the turn at the local intersection-- that would not have happened even 2 years ago in my neck of the woods (London, England). Tesla was the 2nd highest selling car in 2021 in the UK, beating the likes of Jaguar Land Rover. So by value, way in the top. A Tesla here probably costs in pounds about what it does in dollars in USA (so say multiply your prices by 1.3x).

Every major manufacturer will have a full range of EVs, fairly shortly. I like the look of the Mercedes one, a lot. But those are traditionally expensive to repair and high depreciation (in North America) so may not be appropriate.

EVs will cost more up front than comparable Internal Combustion Engine cars. They should make that back over their lifetime in lower fuel costs & lower repair expenses. Tesla seems to be way out in front in things like supercharger network (aka "the safety blanket"). See threads here. However build quality is poor, customer service is very poor - at least from all reports. People love their Teslas.
This might sound stupid, but despite a recent thread I had on here recently about wanting a luxury vehicle, I don't want a BMW, Mercedes, or Tesla, because I just want to look average and I don't want the attention.

Perhaps Teslas will become more "normal" in a couple years, but right now they are viewed as luxury vehicles. My understanding is also that they are no longer eligible for the tax credit.

All that said, I am happy to see your optimism about more EVs being available here soon.
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CoastLawyer2030
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Re: What is the State of Hybrid/Electric Cars and the Federal Tax Credit?

Post by CoastLawyer2030 »

psteinx wrote: Thu Jan 20, 2022 11:46 am I think you're conflating two variations on electric technology:

1) Hybrid (conventional, as first popularized by the Prius)
This is an internal combustion engine, paired with a battery system that generates when you brake, boosting MPG. The batteries are small-ish, and you don't plug them in.

2) Plug-in Hybrid
Like the above, but usually with a bigger battery (for 25+ miles of battery only driving), that you can plug in to charge at home.

Then, there's a third:
3) Straight electric
No internal combustion at all - only a (bigger) battery, that gets you from 70-350 miles on a charge. Examplars include Teslas and Nissan Leafs

===

Toyota is big on option 1, but not so big on 2 or 3. Most manufacturers have plans to roll out more of option 3, in the next few years. I think that the federal tax credit applies to 2 or 3, but not 1, and only up to a certain sales threshold, per manufacturer. Tesla has used all of their threshold up, so there's, I think, no credit for Teslas now.

Of course, there are other things that affect the net price and usability of the different electric car options, including current car shortages (and thus higher prices), possibilities for better models, made more efficiently in the years to come (driving down the price of electrics), and potentially better charging options (increasing the useability of pure electrics - category 3 above.
Thanks for this clarification. Makes sense.
Valuethinker
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Re: What is the State of Hybrid/Electric Cars and the Federal Tax Credit?

Post by Valuethinker »

CoastLawyer2030 wrote: Fri Jan 21, 2022 7:25 am
This might sound stupid, but despite a recent thread I had on here recently about wanting a luxury vehicle, I don't want a BMW, Mercedes, or Tesla, because I just want to look average and I don't want the attention.

Perhaps Teslas will become more "normal" in a couple years, but right now they are viewed as luxury vehicles. My understanding is also that they are no longer eligible for the tax credit.

All that said, I am happy to see your optimism about more EVs being available here soon.
"luxury" varies by where you are. Jaguar & Land Rover are luxury here, but they are assembled in Britain. Plenty of Mercedes & BMW, but they are not necessarily expensive. Ofc in North America a luxury pickup truck can be as expensive as a luxury car.

Hyundai Ioniq 5 seems to be the one my friends are buying. Range is a little over 200 miles (about 225 miles I think).

At the lower price brackets, the tax credit matters more. Nonetheless by and large these are high end cars and I doubt that the tax credit makes a big difference. It is simply the cost of an (expensive) options package on a basic vehicle.
Trism
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Re: What is the State of Hybrid/Electric Cars and the Federal Tax Credit?

Post by Trism »

CoastLawyer2030 wrote: Fri Jan 21, 2022 7:25 am
Valuethinker wrote: Fri Jan 21, 2022 6:58 am
CoastLawyer2030 wrote: Thu Jan 20, 2022 11:37 am My wife's Toyota Rav4 is now ten years old and has 150,000 miles. We are keeping it for as long as it rides, but we have been looking at cars so she has a general idea of what to get when her Rav4 finally calls it a day.

First, I am surprised to see so many electric car options. We have not been in the market for a car in a long time, and it's impressive how many electric cars there are. Toyota seems to have a hybrid of every one of their models. Same with Honda. The reviews seem to indicate good performance with really impressive gas mileage.

But, when I look at the list of eligible vehicles for the federal tax credit, I am completely baffled as to why such a small amount of cars are on the eligible list. Basically no Hondas are eligible. The only eligible Toyotas are the Prius and Rav4 Prime.

Why is this? Will more vehicles be eligible soon?

Should we be holding out until, say, 2025 to dip our toe into the electric/hybrid car waters?
Apologies if this is irrelevant.

But my understanding is that in places with High Occupancy Vehicle lanes, only 100% electric vehicles now qualify for eligibility. That, alone, would tip me if I lived in a high traffic congestion area.

Right now, a Plug In Hybrid Electric Vehicle may make sense, particularly for those whose regular commute is relatively short. They have small battery packs so there could be a need to charge at work, as well.

However a PHEV is also an unhappy compromise with a small battery pack. It's the pure EVs that give the big improvements in mileage and pollution. Also mechanical simplicity.

It's reached the point where I saw not one but two Teslas in succession taking the turn at the local intersection-- that would not have happened even 2 years ago in my neck of the woods (London, England). Tesla was the 2nd highest selling car in 2021 in the UK, beating the likes of Jaguar Land Rover. So by value, way in the top. A Tesla here probably costs in pounds about what it does in dollars in USA (so say multiply your prices by 1.3x).

Every major manufacturer will have a full range of EVs, fairly shortly. I like the look of the Mercedes one, a lot. But those are traditionally expensive to repair and high depreciation (in North America) so may not be appropriate.

EVs will cost more up front than comparable Internal Combustion Engine cars. They should make that back over their lifetime in lower fuel costs & lower repair expenses. Tesla seems to be way out in front in things like supercharger network (aka "the safety blanket"). See threads here. However build quality is poor, customer service is very poor - at least from all reports. People love their Teslas.
This might sound stupid, but despite a recent thread I had on here recently about wanting a luxury vehicle, I don't want a BMW, Mercedes, or Tesla, because I just want to look average and I don't want the attention.

Perhaps Teslas will become more "normal" in a couple years, but right now they are viewed as luxury vehicles. My understanding is also that they are no longer eligible for the tax credit.

All that said, I am happy to see your optimism about more EVs being available here soon.
Out of curiosity, aside from the tougher parts of town (which most people can and do avoid), where would you not look "relatively average" driving a BMW, Mercedes or Tesla?

They're everywhere I go.

A Mercedes C Class isn't exactly a RR Phantom. Can't remember the time I even took a second glance at an S Class.
davemanjam
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Re: What is the State of Hybrid/Electric Cars and the Federal Tax Credit?

Post by davemanjam »

This website details available tax credits:

https://www.fueleconomy.gov/feg/taxevb.shtml
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CoastLawyer2030
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Re: What is the State of Hybrid/Electric Cars and the Federal Tax Credit?

Post by CoastLawyer2030 »

Trism wrote: Sat Jan 22, 2022 5:39 am Out of curiosity, aside from the tougher parts of town (which most people can and do avoid), where would you not look "relatively average" driving a BMW, Mercedes or Tesla?

They're everywhere I go.

A Mercedes C Class isn't exactly a RR Phantom. Can't remember the time I even took a second glance at an S Class.
I am in a relatively rural/blue collar area of NE Ohio (close to the former Lordstown GM plant). Most people drive American cars or trucks. There are definitely plenty of Mercedes, BMWs, and Teslas around, but they are a fraction of what I see on the road.
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Re: What is the State of Hybrid/Electric Cars and the Federal Tax Credit?

Post by neilpilot »

CoastLawyer2030 wrote: Sat Jan 22, 2022 10:14 am
Trism wrote: Sat Jan 22, 2022 5:39 am Out of curiosity, aside from the tougher parts of town (which most people can and do avoid), where would you not look "relatively average" driving a BMW, Mercedes or Tesla?

They're everywhere I go.

A Mercedes C Class isn't exactly a RR Phantom. Can't remember the time I even took a second glance at an S Class.
I am in a relatively rural/blue collar area of NE Ohio (close to the former Lordstown GM plant). Most people drive American cars or trucks. There are definitely plenty of Mercedes, BMWs, and Teslas around, but they are a fraction of what I see on the road.
Where I live every car brand I see is a fraction of what I see on the road. :mrgreen:
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Re: What is the State of Hybrid/Electric Cars and the Federal Tax Credit?

Post by crefwatch »

It's not precisely on the topic, but I would urge the OP to read other threads on EVs. The daily usage and frequency of long road trips makes a big difference when you own an EV. You can't let the availability of a tax credit be the major factor in your FIRST purchase of an EV.

I was nervous about buying the first year of the second-generation Prius hybrid. But it worked out absolutely great - despite the widespread fallacy that the battery would not last (despite the extra-long factory warranty on the power train & battery.) However, my 2021 Chevy Bolt is awaiting a new battery, along with every Bolt ever manufactured. Growing pains. Meanwhile, I have charging and storage restrictions recommended by Chevy.
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Re: What is the State of Hybrid/Electric Cars and the Federal Tax Credit?

Post by Big Dog »

CoastLawyer2030 wrote: Fri Jan 21, 2022 7:26 am
psteinx wrote: Thu Jan 20, 2022 11:46 am I think you're conflating two variations on electric technology:

1) Hybrid (conventional, as first popularized by the Prius)
This is an internal combustion engine, paired with a battery system that generates when you brake, boosting MPG. The batteries are small-ish, and you don't plug them in.

2) Plug-in Hybrid
Like the above, but usually with a bigger battery (for 25+ miles of battery only driving), that you can plug in to charge at home.

Then, there's a third:
3) Straight electric
No internal combustion at all - only a (bigger) battery, that gets you from 70-350 miles on a charge. Examplars include Teslas and Nissan Leafs

===

Toyota is big on option 1, but not so big on 2 or 3. Most manufacturers have plans to roll out more of option 3, in the next few years. I think that the federal tax credit applies to 2 or 3, but not 1, and only up to a certain sales threshold, per manufacturer. Tesla has used all of their threshold up, so there's, I think, no credit for Teslas now.

Of course, there are other things that affect the net price and usability of the different electric car options, including current car shortages (and thus higher prices), possibilities for better models, made more efficiently in the years to come (driving down the price of electrics), and potentially better charging options (increasing the useability of pure electrics - category 3 above.
Thanks for this clarification. Makes sense.
Actually, Toyota invested heavily in #3, but used Hydrogen fuel cells to make the electricity. While hygdrogen has government support in Japan, hydrogen never caught on in the US, so Toyota has pivoted to pushing Hybrids in the US.
02nz
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Re: What is the State of Hybrid/Electric Cars and the Federal Tax Credit?

Post by 02nz »

CoastLawyer2030 wrote: Thu Jan 20, 2022 11:37 am My wife's Toyota Rav4 is now ten years old and has 150,000 miles. We are keeping it for as long as it rides, but we have been looking at cars so she has a general idea of what to get when her Rav4 finally calls it a day.

First, I am surprised to see so many electric car options. We have not been in the market for a car in a long time, and it's impressive how many electric cars there are. Toyota seems to have a hybrid of every one of their models. Same with Honda. The reviews seem to indicate good performance with really impressive gas mileage.

But, when I look at the list of eligible vehicles for the federal tax credit, I am completely baffled as to why such a small amount of cars are on the eligible list. Basically no Hondas are eligible. The only eligible Toyotas are the Prius and Rav4 Prime.

Why is this? Will more vehicles be eligible soon?

Should we be holding out until, say, 2025 to dip our toe into the electric/hybrid car waters?
As others have noted, Toyota and Honda are way behind in bringing battery electric vehicles (BEVs) to the US market.

At the moment, Kia and Hyundai seem to have the lead in the mainstream market if you're looking for something other than Tesla. (Tesla and GM vehicles no longer qualify for the $7500 federal tax credit.) The Hyundai Ioniq 5 and (upcoming) Kia EV6 have gotten excellent reviews. They have a big advantage of using an 800V architecture (like the much more expensive Porsche Taycan), which allows them to charge much faster than most other EVs, including even Teslas, when using high-powered DC charging stations that are being rolled out (250 KW and above). The Ioniq 5 and EV6, based on the same platform, can charge from 10 to 80% in under 20 minutes. (FWIW I own the older Niro EV and have been very happy with it. It cannot charge anywhere near as quickly as the Ioniq 5 and EV6, though.)
nigel_ht
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Re: What is the State of Hybrid/Electric Cars and the Federal Tax Credit?

Post by nigel_ht »

RAV4 Prime is a great vehicle. In short supply so spendy but still has the $7500 credit IIRC.

If trade-ins are good right now I might consider doing it now while there is a credit if you can get close to MSRP (unlikely but you never know).
OldSport
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Re: What is the State of Hybrid/Electric Cars and the Federal Tax Credit?

Post by OldSport »

mervinj7 wrote: Thu Jan 20, 2022 11:59 am
CoastLawyer2030 wrote: Thu Jan 20, 2022 11:37 am
But, when I look at the list of eligible vehicles for the federal tax credit, I am completely baffled as to why such a small amount of cars are on the eligible list. Basically no Hondas are eligible. The only eligible Toyotas are the Prius and Rav4 Prime.

Why is this? Will more vehicles be eligible soon?
I have electric cars for a few years now, so I don't personally see a reason to wait till 2025.
As far as Toyota is concerned, there are quite openly anti-EV and strongly prefer to promote their existing hybrid platform.

https://chargedevs.com/newswire/toyota- ... t-for-evs/
Its good to have options. While I may eventually go EV for a day to day commute vehicle, want at least one vehicle that doesn't require a plug in. Like to go to remote places, take long road trips, or visit people where I won't be able to plug in (park on street or driveway).

I'm really miffed Acura got rid of the Sport-Hybrid vehicles. That was truly an amazing system that genuinely had good performance and fuel economy in stop and go traffic. Was a competitive advantage and I bought Acura solely because of that - performed MUCH better than anything Toyota. It was a gem.
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