Americans who are thinking about purchasing a new electric vehicle should act quickly if they want to save $ 7,500 at the cost of a car.
Later today, the president is expected to sign his package of tax cuts and spending plans known as a big beautiful account. Although it will increase the debt of the ceiling by $ 5 trillion, the Trump administration has decided to effectively October, there is no fiscal road for Uncle Sam to subsidize the purchase of EV.
This can soon be seen a stampede at the last minute in the next three months, at a time when car-known carmakers such as producers of original equipment, or OEM-can start reducing the line assembly speed so that they are not stuck with excess inventory. Empty dealers can be a lot, even before September is over.
“To mitigate financial impact problems and potential inventory, we think OEMs can decide to reduce EV’s production in the United States starting in the Q325,” UBS analysts wrote on Friday.
The federal tax credit will be history at the end of September – than at the end of the year as it was originally planned.
More importantly, the leasing loan will end then. EV’s leasing contracts have become immensely popular than $ 7,500 There are no fastened wires That limited selection of consumers EV, such as the degree to which the vehicle and its battery were manufactured in the United States.
The 4,000 USD purchase loan for EVS also disappears September.
Biden’s plan to close the availability gap versus the combustion engine cars
EV’s federal tax credit was introduced to The beginning of 2023 As part of the Law on Inflation Reduction, President Biden’s stimulus program has been named because it has passed at a time when the increased price of life has turned the stimulus into a bad word.
The previous administration wanted to reduce the gap of prices between internal combustion cars and EV, which often approached 10,000 USD because of expensive metals such as lithium and nickel used in EV batteries.
While the tax credit helped to ignite the interest, he did not address the availability problem. EV buyers could only ask for this in their annual tax filing, which means they still needed money to pay the whole price initially. Musk highlighted this back in October of that year.
“It is worth noting that many of these incentives like tax credit and what they do, are actually very difficult to access the average person, because most people do not have a $ 10,000 or even $ 7,500 that burn their bank account hole,” he told investors during a quarterly call for earnings. “They can’t be 7,500 USD in 18 months – even six months to get a tax credit.”
Manufacturers can offer higher discounts on a pillow part of the impact
In January 2024, however, it changed as a tax loan was applied directly to the sale site, immediately reducing costs and eliminating consumer problems.
How manufacturers adapt their prices to EV in the new reality at this point is unclear. Some might choose to offer some of the discount to mitigate the impact. Many brands used this approach to Germany when the government had to eliminate the subsidy to buy a “environmental bonus” as part of an urgent budget revision.
However, Trump’s account at the same time abolish penalties To overcome the rules of the corporate average fleet Economics (CAFE). This means that there is even less incentive for hereditary car manufacturers to put pressure on EV, which are not profitable and now suddenly more expensive.
The result can be an internal combustion motor that puts the United States on a very different road from the rest of the world, where EV adoption continues to grow.
“In the long run, we believe that OEMs will focus on ice models on the US market in terms of relaxation of the emission rules and lack of EV stimuli,” UBS added.
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