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Discussion Starter · #1 ·
So I definitely want to upgrade my M3 to a refreshed MS and I've been reading up on the EV credit that will come into effect with the new year if passed. I've been planning and trying to figure out how the MSRP is defined.

If I buy an MS long range (just under $80K), do additional options affect what is defined as the MSRP?
Also I'm pretty sure this is the case, but correct me if I'm wrong, trade in's (like my M3) do not affect MSRP, right?
 

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Your questions are confusing me. There is no correlation between MSRP and the proposed tax credit to the best of my knowledge. As proposed, you would earn the entire credit if you pay over $12,500 for your car and if your total tax burden is greater than the credit(generally speaking). Since the language of this credit is far from finalized, we can't know for sure the details of the final legislation. But as for now, the amount of credit you could get on a Model S purchase is unrelated to the MSRP. And unless they do something very odd, it's also unrelated to your trade-in.
 

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MSRP is the cost of the car and all options minus fees, taxes and likely delivery. Trade in has nothing to do with it.

I don't think we have any idea what this tax credit might look like. Search for the existing one to see how it is worded. The amount of the credit was based on the kw of the battery if I recall - so a Leaf may not have qualified for as much as a 3/Y. The 3/Y/S/X all qualified for the full amount of the first one which has expired for Tesla. There could be all kinds of limitations, it might even have limits on it, maybe it won't be valid for cars over certain prices, I've heard of talk of that for certain programs. If you can afford a $100K car maybe you wouldn't qualify. I think in Canada they may have had a cut off of $50K or something like that. Tesla adjusted prices and shipped the SR or something like that to help people qualify. All kinds of games can be played.
 

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The proposed legislation I saw the most press about was a version that narrowly got out of the Senate finance committee in late May. It does have an $80,000 limit. A LR model S in white exterior and black interior should qualify. I recall that it hardwired the date of eligible purchase to May something, but I heard speculation that would continue to move forward to the date it is signed into law, if that happens. The difference that would occur in 2022 is that the credit would become a refundable tax credit, meaning that even if someone's taxes are less than the credit, they would receive the full effect of the credit. I heard a number of people saying in 2022 it became a rebate at the point of purchase, which is not true for the bill I read, but perhaps they were referring to some other permutation.

 

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Discussion Starter · #7 ·
Your questions are confusing me. There is no correlation between MSRP and the proposed tax credit to the best of my knowledge. As proposed, you would earn the entire credit if you pay over $12,500 for your car and if your total tax burden is greater than the credit(generally speaking). Since the language of this credit is far from finalized, we can't know for sure the details of the final legislation. But as for now, the amount of credit you could get on a Model S purchase is unrelated to the MSRP. And unless they do something very odd, it's also unrelated to your trade-in.
In the text for the proposed tax credit, the vehicle has to have an MSRP of $80K and less to quality. Anything with an MSRP above $80K will not be eligible for the $10K credit. Will pull the text shortly.
 

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The proposed legislation I read does not mention MSRP. And that perfectly illustrates the point that others and I are making. Until the legislation is enacted, any discussion of the provisions of such legislation is conjecture.
 

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Until the legislation is enacted, any discussion of the provisions of such legislation is conjecture.
But it isn't just uneducated speculation. Looking at current bills gives us some idea of the things that are being considered. In defense of the OP, he did say "if passed" and I think is earnestly trying to sort out whether the model S could meet the $80k limit. There might not be any limit in the end, or it could be $60k, or $100k. The state of PA has had a limit of $50k at times and $60k at other times. I personally think an upper limit is a reasonable feature for a tax credit.
 
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Discussion Starter · #10 ·
DESCRIPTION OF THE CHAIRMAN'S MODIFICATION TO THE PROVISIONS OF THE "CLEAN ENERGY FOR AMERICA ACT"
May 26, 2021

Page 8

In addition, the Chairman's modification requires that a new qualified plug-in electric drive motor vehicle purchased by the taxpayer has a manufacturer's suggested retail price (MSRP) of $80,000 or less. That is, the credit amount is reduced to $0 if the MSRP for the vehicle is more than $80,000. The changes to credit amounts are effective for vehicles acquired after December 31, 2021.

 

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DESCRIPTION OF THE CHAIRMAN'S MODIFICATION TO THE PROVISIONS OF THE "CLEAN ENERGY FOR AMERICA ACT"
May 26, 2021

Page 8

In addition, the Chairman's modification requires that a new qualified plug-in electric drive motor vehicle purchased by the taxpayer has a manufacturer's suggested retail price (MSRP) of $80,000 or less. That is, the credit amount is reduced to $0 if the MSRP for the vehicle is more than $80,000. The changes to credit amounts are effective for vehicles acquired after December 31, 2021.

Should the bill pass in this iteration, MSRP at Tesla is the price you pay absent taxes and fees. Since Tesla doesn't discount, the price you see in the configurator would be the MSRP. So. select all options you like up to $80,000 and get the full credit. Spend $80,001 and get nothing.
 

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CNET is saying this is the final markup of the legislation. So its likely the content of the bill is finalized, and its just a matter of votes.
Politics isn't my thing, but from what I read about this, I have a very different understanding. Because it was a tie vote coming out of the finance committee, it is in a very weak position for passing, and certainly not in this exact form. I can't imagine the Union clause standing, among other things.


I found this article helpful, and specifically the 2 links at the end of it. One is to the 76 page finance committee recommendation, and one is to the 17 page addendum that you had linked to above. It is important to also read the bigger document. The most important piece is simply eliminating the manufacturer-based limits that currently exist, and provide a new framework for the credit phase out. This is in the larger document and timing is defined as:

Font Rectangle Number Circle Screenshot


The smaller modifications document adds in the $2500 US-made and $2500 Union-made credit along with the $80k limit. My read of it is that THESE start after Dec 31,2021. So, might it be possible that someone could still get the $7500 credit on an EV greater than $80k, at least if bought before the end of the year, IF this form of the legislation were to pass?

Once again acknowledging these are proposals for legislation. Nothing has yet changed from the $7500 credit that already expired for Tesla.
 
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