Like Gaspar, Melchior, and Balthazar, we bring you gifts of news: A tax credit boon, a Wells Fargo Settlement, a possible Tesla layoff, and an all-electric Audi future. Wait. That’s four. The fourth Magi is, uh, Ralph. Gaspar, Melchior, Balthazar, and Ralph.
Welcome to The Morning Dump, bite-sized stories corralled into a single article for your morning perusal. If your morning coffee’s working a little too well, pull up a throne and have a gander at the best of the rest of yesterday.
The Treasury Department’s Delay Is Good For Consumers
I love news that continues over three consecutive days and I love news that’s good for consumers. On Monday, we discussed how Senator Joe Manchin (a key vote to passing the Inflation Reduction Act) was pretty steamed that automakers were looking for workarounds to continue to give consumers the full $7,500 EV tax credit. Then, yesterday, we learned that the Treasury Department was delaying an interpretation of certain parts of the law until March 31st, 2023. I surmised that there was an upside for consumers here and now we’ve got details.
You should go read this Associated Press report because they’ve done the hard work of talking to a bunch of people who figured all this out. It seems like some of the requirements for the tax credit will go into effect on January 1st (price limits, income limits), but the vehicles only need to be built in North America with batteries built in North America, the rest of the stuff about sourcing battery materials is delayed.
Basically, this is great news if you were after a Tesla Model 3, a Chevrolet Bolt/Bolt EUV, and a few others.
Here’s the key part, from the AP:
“It should allow some consumers to get an EV a little bit cheaper than they might have otherwise,” said Chris Harto, a senior policy analyst on transportation and energy for Consumer Reports magazine.
With a base price of $26,595 including shipping, General Motors’ Chevrolet Bolt hatchback is among the lowest-cost EVs on sale in the U.S. today. A $7,500 tax credit would knock the price down to just over $19,000 – less than the average price of a used vehicle in the U.S. That could bring buyers off the sidelines.
GM says it’s watching developments with the tax credit rules. “We feel well-positioned, but we’re still waiting on guidance for vehicle eligibility,” spokeswoman Jeannine Ginivan said Tuesday.
This is going to cause some chaos as your dealer might not know what is going on and, frankly, there’s still some of this that feels up in the air. My best advice is to print out the AP article (or this article from The Verge) and take it with you.
If the car you want still qualifies under the old rules you need to buy it in the next 10 days. Super excited about the Kia EV6 or Hyundai Ioniq 5? Go get it right now; those aren’t built in North America, so they’re screwed starting in January.
If you wanted a car that no longer qualified (this mostly applies to GM and Tesla, according to everything we have read), it seems like buying between January 1st and March 31st is the ideal time to snag an extra $3k or $4k off the price if the car is below the price cap and your income is below the new income cap ($150,000 for a single taxpayer, $300,000 filing jointly.)
Because most automakers have not sourced battery materials or built battery factories here, it’ll probably be a couple of years before the full $7,500 tax credit is back in place for most electric cars. That, or the feds will back off on some of these sourcing rules. We could definitely see that happening.
Audi Is Going Full EV By 2033, Globally
Audi has pledged to stop introducing new gas-powered models after 2026 and phase out all non-EVs by 2033, according to a new press release that outlines the company’s plans.
Here’s what Audi is saying:
Audi is all in on electromobility: As of 2026, the brand with the four rings will only launch all-electric models onto the global market, gradually phasing out production of its combustion models by 2033. Based on this clear decision made as part of its Vorsprung 2030 corporate strategy, Audi is now taking steps to prepare its global facilities for the production of all-electric cars.
Unlike many of its competitors, Audi is building on its existing global production network to achieve this vision. “Step by step, we are bringing all our sites into the future,” says Audi Board Member for Production and Logistics Gerd Walker. “We don’t want any standalone lighthouse projects on greenfield sites. Instead, we are investing in our existing plants so they end up being just as efficient and flexible as newly built production sites or greenfield plants.” According to Walker, this is sustainability in action – in economic, ecological, and social aspects. “The path Audi is taking conserves resources and accelerates our transformation to a provider of sustainable premium mobility,” Walker emphasizes.
Electromobility is such a German way to put it!
Report: Layoffs Coming To Tesla
Electrek, which is often fairly well-sourced when it comes to Tesla, is reporting that Tesla is going to reinstate a hiring freeze and start laying off people soon.
Tesla has communicated to some employees that it is stopping hiring for now. On top of the hiring freeze, Tesla also said that teams will be expected to make layoffs during the first quarter of 2023.
It’s not clear how extensive the hiring freeze will be as Tesla is still planning to expand in some manufacturing locations. No further details were made available at this time.
The moves come as Tesla’s stock has been falling all year despite the company’s financials hitting new records virtually every quarter.
We’d reach out to Tesla for comment but they don’t have media/comms people anymore so we can’t. [Editor’s Note: Maybe we’ll just tweet at Elon Musk from The Autopian’s account. That seems to get things done these days. -PG]
Wells Fargo To Pay $3.7 Billion For Auto And Mortgage Chicanery
And now for a brief musical interlude:
Oh well, the Wells Fargo wagon is a… comin’ down the street, I can’t wait to see how they’re gonna screw me!
Wells Fargo is finally going to pay up for royally misleading customers of its auto loan and mortgage products, including repossessing cars for no reason other than greed.
From a CNN report:
The Consumer Financial Protection Bureau said Wells Fargo’s “illegal activity” included repeatedly misapplying loan payments, wrongfully foreclosing on homes, illegally repossessing vehicles, incorrectly assessing fees and interest and charging surprise overdraft fees.
The CFPB ordered Wells Fargo (WFC) to pay the $1.7 billion civil penalty in addition to more than $2 billion to compensate consumers for a range of “illegal activity.” CFPB officials say this is the largest penalty imposed by the agency.
Has Wells Fargo learned its lesson?
“Wells Fargo’s rinse-repeat cycle of violating the law has harmed millions of American families,” Rohit Chopra, the CFPB’s director, said in a statement.
[…]
During a call with reporters, Chopra said the new settlement should not be read as a signal that “Wells Fargo has moved past its long-standing problems or that the CFPB’s work is done here.”
Yeah, get’em!
The Flush
Are these sudden changes in the enforcement of tax provisions make you want to get off the fence and buy an EV? Or are you still waiting for the industry to catch up?
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West Virginia Senator Joe Manchin Is In A Fight With Hyundai Over EV Tax Credits
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Ford Raises The Ford F-150 Lighting Base Price Again
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Elon Musk Sells $3.6 Billion In Tesla Stock
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The Volvo XC40 and Escape are the only two SUVs that did well on new IIHS test
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The 2023 Subaru WRX Miraculously Only Costs $31,625
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Lucid Gets A $915 Million Boost From The Saudis
Got a hot tip? Send it to us here. Or check out the stories on our homepage.
Photos: GM, Tesla, Audi
I have a signed agreement with Chevrolet to repurchase my 2020 Bolt under the lemon law (because they can’t/won’t fix the battery issue) and I’m just waiting to turn in the car. I was planning to buy a 2023 Bolt anyway, so the extra $3750 is a motivation to get the deal done between Jan 1 and March 31.
“The CFPB ordered Wells Fargo (WFC) to pay the $1.7 billion civil penalty in addition to more than $2 billion to compensate consumers for a range of “illegal activity.” CFPB officials say this is the largest penalty imposed by the agency.”
Unless that $2B is completely and totally refunding every victim – with interest – of Wells Fargo’s continuously criminal activity, and the CFPB is actually going to fucking shut the place down? What’s the point?
Wells Fargo’s licenses should have been permanently revoked one of the first 5+ times it’s been caught engaging in – and I cannot emphasize this enough – wanton and explicit criminal activity. But they aren’t. There’s no monitoring, no auditing, no revocation of licensing, no real consequences at all.
$3.7B penalty? That isn’t even a blip on their balance sheet. Their gross profit for 2021 – that’s profit – was $78.5 billion dollars. That’s how much money they pocketed. 5% of gross profits? That’s literally cost of doing business.
“Are these sudden changes in the enforcement of tax provisions make you want to get off the fence and buy an EV? Or are you still waiting for the industry to catch up?”
Show me an EV that isn’t the very definition of an unrepairable, disposable car. Go ahead. I’ll wait.
“Prius!” Nope, HV battery goes, it invariably costs more than the car is worth. “Chevy!” Uh, they’ve recalled those for fire how many times? And a rock to the underside totals them out. And good luck finding the battery – dealer price on the part ranges $12k to $35k. “Uh… Mitsubishi i-MiEV!” Just the remote for those things sells for $400+ if you can find one and the battery is thousands of dollars.
Still no interest in buying an EV. I rent my home, the company that owns it will never install a charger circuit and I damn sure am not going to pay to upgrade their house.
Want me to buy one? Bigger charger network so that I can plug it in at work or when I’m out during lunch or whenever.
As for Wells Fargo, all I can think of is “if that company really were a person per Citizen’s United, it would be in jail.”
EV eventually. Some house improvements need to be done first, and then a new EV will be considered. But I want a larger AWD one. Those aren’t out yet. 3 rows for humans/dogs and the ability to tow a small popup camper.
If I could find a Bolt near sticker anywhere around me in PA, I would buy one tomorrow, regardless of whether or not I got a tax credit. I think those are a great deal even at $27k. If I had a chance to get one for less than $20k with the tax credit, I would be super stoked, but it wouldn’t get me to buy two of them so the tax break is probably a moot point if the dealers would stop overpricing them. If I could get the tax break then I might find one for sale in my area around $27k again, though. My nearest dealer, Turner Chevrolet in Harrisburg, is asking over $39k for the Bolt LT (not the EUV).
FLUSH: no new car excited me … especially EVs… Especially rural living areas like where I am. They’re so far from being a economical and logical choice they don’t even appear on the radar. Truly believe the industry has ALOT of catching up to do especially if they want to appeal to those not crammed into caged cities and suburbs. And on top of that is serviceability, even the local dealerships can’t work on them here and they have to be shipped 100s of miles even for a basic repair.
No thankyou I’ll just keep releasing Hydrocarbons from my vehicles like the 100s of this world countries that will continue to do so as well….even long after the bam of ICE vehicles.
Supposed to say THIRD WORLD COUNTRIES
I’ve never actually purchased a new car before, so I’m kind of in the “jump” position on the fence if I can snag a brand spank’n new Bolt for under $20K. I had my eye on the new Equinox, but I have my suspicions as to whether that will really end up as cheap as they say it might.
My 2012 Volt is down to about 20 miles for a full charge, and I’m running it on “Mountain” (Hold) mode whenever I drive it to try and extend the battery a bit longer, thus giving me only 10 or 11 electric miles each time I take it out. I doubt I’m going to get too many more years (months?) out of it, so picking up a new Bolt right now would be ideal. I won’t be able to drive it halfway across the country and back like I did with the Volt a few times, but I prefer to take my ’94 Brougham on trips like that anyway.
And I have a Spark, so a Bolt would also allow me to complete my Chevy electricity-name-theme collection. I think GM needs to make grill-badges for that achievement.
Mountain mode I think is kinda hard on the engine and battery. It reduces your mpg quite a bit. There is no free lunch for energy conversion.
The min state of charge for the Volt seems to be really conservative. Running it down to zero is normal.
Why not run it as designed?
My mpg still seems to hover right around 40 – the only thing I’ve noticed with Mountain mode is the gas engine kicks on with 9 miles worth of electrons left. I started doing that after noticing a pretty strong uptick of Volt-forum members with early gen 1 Volts experiencing the dreaded “reduced propulsion” message. Running in Mountain mode has been suggested a number of times as a way to extend the life of the battery a bit longer. We’ll see. It currently has 108,000 miles and I’d like to get a few more years out of it if possible, especially since it’s still in nice overall condition. Can’t complain though – it paid for itself in gas savings after a little more than 4-years of ownership. Every mile has been gravy for the last couple of years.
>The moves come as Tesla’s stock has been falling all year despite the company’s financials hitting new records virtually every quarter.
Wow that’s crazy. I wonder what else could have happened this year that could have made people realize Tesla was WILDLY overvalued?
>Are these sudden changes in the enforcement of tax provisions make you want to get off the fence and buy an EV?
Nope. Despite my previous considerations of a truck, I’ve wandered back into the “hot hatch” camp and settled on a Golf GTI. Make it electric and we’ll talk.
I actually don’t drive all that much and when I do it’s longer out of town trips, so I’m likely to transition through plug in hybrid before going EV. That’s several years down the road though as my current car has lots of life left in it.
Next car will probably be an EV, but that’s ~3 years down the road. If I did need a car now, I probably wouldn’t go full EV. I agree with what other commenters have stated here, I’m waiting for tech to improve, specifically infrastructure.
While I would like to get some of my tax money back, I can’t really justify the Bolt even at 18k and change after taxes.
I am just surprised we are still subsidizing the EV’s at all at this point. If they are so much better, they should stand on their own.
I don’t love the Bolt, but I like it. The last one I test drove had way more personality than I was expecting. But most of all, when comparing it to its closest competition, it really is remarkable how cheap the Bolt is.
The Leaf Plus (62kWh) is $36k, the Kona is $34k where available, and the Niro is $40k. Even the Mini is $30k.
It may not be my platonic ideal (I want faster charging for road trips), but whether Chevy’s made a deal with the devil or they’re just taking the loss on the chin, I respect their commitment to making this little hatch the most affordable EV in America.
I ordered a Bolt EUV back in September, with the dealer not expecting it to be ready until January…perfect, I thought! It came last week.
We test drove it and liked the car a lot, but passed on it because of the tax credit and will probably order another one with the hopes it comes before March (my wife wants it but now wants it in a different color than what we ordered).
I have dealt with Wells Fargo over the years and did not enjoy the experiences of working with them. I would not bank with them (even when they offered $600 to move my accounts over to them).
Based on the shenanigans I read about, you probably have an account with them and don’t even know it. We might all.
Fun Fact: In the Wells Fargo Wagon video At 2:40, that’s little Opie Cunningham (Ron Howard). “River City” Iowa = Mason City Iowa.
I want an EV, but not ready yet (on multiple fronts); currently renting an apartment but will be moving for work & buying a house mid-next year. Also, I want a 3-row, and so will wait to cross-shop the Rivian R1S/Kia EV9/VW ID. Buzz.
If I can get a Bolt starting at $20k in January, I’m in, assuming I can find one in stock near enough to be worth buying. That’s a great price for a great commuter and grocery getter. I’d pay a little extra for some options, but not much because that wouldn’t be the point of this car for me.
I’m not trading anything in, though, because long distances still belong to ICE and hybrids.
I am strongly considering selling my 3rd-Gen 4Runner for some insane, un-Christian amount of money on BaT, and then using the proceeds to snag the cheapest and most discounted Bolt I can find
Do it! Get out at the top of the market! Prices have already started to fall.
Not really true about long distance driving not being the domain of an EV. My kids took our Bolt on a highway circuit from CA to TN and back last summer — mainly using the Electrify America network — and it worked great. The range is about 260 miles, which was plenty, and the price for fuel was a fraction of what it would have cost if driving a similarly-sized ICE car. The only issues were a couple damaged tires that needed servicing due to road debris — and one of those setbacks had also damaged a wheel, unfortunately — but no issues caused by it being an EV.
Long distances are becoming more EV friendly, but really, it’s not true that you can just go without planning and be satisfied that the experience will be close enough to gas.
I look forward to more availability, but for now you still have to stick to major routes and plan stops around charging stations. That’s a nerdy kind of fun that I’m not always in the mood for.
I like rural fishing spots just a little too much to live with only an EV right now.
Also, I wouldn’t want to go cross-country distances in something as small as a Bolt unless I had no other choices.
I’ve been on two 300+ mile trips with my Lightning so far. (extended range battery version)
Road tripping in an EV is a lifestyle choice. You can do it, but it is not something a normal person should be expected to deal with yet. It takes extra time, advance planning of stops, and altered driving style. EVs aren’t ready for mainstream road tripping yet.
And really, the biggest problem is something that EV advocates write off with comments about range anxiety and bladder capacity: destination chargers basically don’t exist. In your gas powered car you can drive 200 miles to your destination and spend a minute or two gassing up at the corner station before finishing your trip and spending time with your friends and family, or participating in your chosen activity. In your EV you travel 200 miles with range to spare and need to park your ass at some shopping plaza or rest stop for 40 minutes (if you find a DCFC) or several hours while your car charges up, because the place you’re going doesn’t have a Level 2 charger – and if it does, there’s a fully charged Leaf or Bolt taking up the spot anyway.
We’re not in a rush for an EV yet. We’ll likely look at PHEVs for my wife’s next car since they suit her needs perfectly but the combination of road trips we do every few months to see family and the fact that we like to spend a fair amount of time in assorted locations in the middle of no where makes them poorly suited for our needs.
I also want to see the technology improve a bit before I choose to daily one. It seems like the general consensus is that no one outside of Porsche has managed to infuse much driving character other than GOES FAST IN A STRAIGHT LINE into them just yet. Hopefully than changes, but based on all the reports of fake manual transmissions being developed for them and such I’m not particularly optimistic yet.
The i4 seems pretty well put together. But, compared to an EV6 or Ioniq 5, or more importantly the upcoming Ioniq 6, you get way more for your EV dollar out of those models.
By all accounts the Jaguar I-Pace has a fairly dynamic driving experience. But it’s getting long in the tooth now, has poor range by current standards, and takes forever to charge.
Major caveat on the EV Tax Credit, if you do not owe $7500 or over for 2023’s taxes(ie in 2024) then you can’t claim the full tax credit of $7500, or corresponding amounts for corresponding amounts owed.
So update those W-2s now to have an extra dependent or 2 if you think you’ll be buying an EV next year.(I am not a tax guy, do not follow my tax advice, just saying, it’s tax stuff not a check they give you when you buy it).
That’s incorrect. You’ll still get overpayment refunded. Non-refundable tax credits just mean that your tax liability can’t go below zero. So if you’ve been paying in all year and pay $8500, and your tax burden would also be $8500 before the EV credit, you’ll get $7500 back. But if your tax burden is, say, $6000, the tax credit can only wipe that much away. There are some tax credits that can make your tax burden negative, but not this one.
The terminology is a bit confusing, and it might be a good idea to check with a tax professional to be sure you don’t do anything to lose it (such as taking capital losses that reduce your tax liability too much), but you can still qualify even if you get a tax refund.
Claiming extra dependents on your W4 won’t change anything about your actual tax liability, which is what matters here. Your withholdings through the year will not hurt you on claiming this.
Non-refundable means tax liability won’t go below zero. Overpayments will still be refunded.
Refundable means you can end up with a tax liability less than zero, getting you more back than you put in through the year.
And nearly anyone able to afford most EVs easily qualifies, doesn’t take much to reach the $7,500 threshold.
The $150k / $300k limit is too low, that qualifies as a living wage in the Boston area and most making that amount, especially with kids, that make right around the limit would be impacted. Is there a sliding scale like previous incentives or is it a hard cutoff at 150/300?
Hard cutoff, based on modified adjusted gross. So a clever accountant can probably find enough deductions for someone with significantly more to still claim it, but it might involve maximizing your IRA/401k/retirement contributions and other noticeable changes for the year.
“Are these sudden changes in the enforcement of tax provisions make you want to get off the fence and buy an EV? Or are you still waiting for the industry to catch up?”
I have a PHEV and I rent. I probably won’t get an EV until and unless I buy a home. I’m tempted, but a huge portion of my driving is covered by electric and I can just plug into a regular outlet or run on gas at ~50 mpg.
That said, the option to trade my Niro for a Bolt and get money back is kind of tempting.
I’ve got a short-range EV that takes care of 95% of my travel needs, and a Tundra for everything else. I thought seriously about getting a longer range EV to replace the Tundra, but with all the improvements in the relatively near future (5 years or less), I decided to keep what I have and see what develops.
Flush: I want to see what is up with Porsche and their synthetic fuel first. Hopefully it can attract other businesses to explore this endeavor and provide a real decent alternative to EVs. It would be devastating if other manufacturers disregard other alternate ways to bring, study and provide carbon neutral fuels to vehicle platforms that is not a battery. Plus it will avoid spending 20 minutes to re-charge a battery. And it is -43 with a wind chill here in the balmy state of Montana. Who wants to wait 2o minutes recharging a battery inside a gas station when it is this ass-clinching cold.
Honestly with the push towards EVs, I see big oil figuring out how to reduce pollutants so much that fuel is not bad any longer….simply because from a business standpoint they do eventually stand to lose in incredible amount.
I’m hopeful for synfuel, too, and I’m always pushing for a diversified approach, but the numbers are just not in synfuel’s favor. The biggest challenges with decarbonization aren’t minerals like lithium or platinum or distribution challenges like pressure tanks. It’s energy. Raw energy on an unbelievably massive scale.
US power plants produce around 4.11 billion MWh per year.
Converting 3.2 trillion VMT/yr from gas/diesel to electric (BEVs) would require an additional 1.25 billion MWh per year for the US alone.
Hydrogen fuel cells require (by my calcs) 3-3.5x as much energy per VMT as BEVs. Now we’re talking 3.75-4.38 billion MWh.
Synfuel is made from hydrogen, and by most estimates, it is 4-4.5x as energy intensive as BEVs, so now we’re talking 5-5.63 billion MWh.
If we want to maintain anything resembling a modern standard of living, we have to decarbonize every industry, and fast (carbon budget is gone by 2032 at this rate). But the cruel irony is, if we’re too focused on our standard of living, too attached to the way things are, we guarantee the loss of our way of life. We’re walking the proverbial razor’s edge.
Synfuel has excellent and obvious appeal, but its scaling potential is awful and the energy costs would bite into residential and industrial decarbonization efforts (those also require tons of electricity). Synfuel lets us preserve things the way they are, but to scale it fast enough, we’d have to turn our entire economy upside down and likely nationalize the energy industry. (Not saying that’s entirely off the table.)
So that’s why hundreds of billions of dollars go into battery tech while tens of billions go into fuel cells and hundreds of millions go into synfuel research. Outside of nationalized responses (which includes light rail), BEVs should be shouldering the majority of transportation, while synfuels and hydrogen should be limited to smaller niches with more stringent requirements.
Regarding synthetic fuel… I predict nothing will come of it mainly due to the fact that fuel will rely on ICE tech that has less than half the efficiency of a BEV powertrain.
BEVs are never going to have more than 40% of the market without multiple major transformative capacity breakthroughs and/or physics-defying superconductor developments.
The future is definitely going to be some form of hybrid powertrain for the rest of the market. So the question is what the second fuel will be. I think hydrogen has the lead right now, but I wouldn’t write off synthetic fuel or internal combustion.
Matt, you have your note about cars like the EV6 wrong. Tax credits are no longer available, even now, for any cars made outside North America. The Feds have a list of such vehicles assembled in North America here:
https://afdc.energy.gov/laws/electric-vehicles-for-tax-credit
They really should have just had all the provisions go into effect at the same time. Between the staggered implementation and the questions of what constitutes a binding purchase agreement (for the purposes of still getting the old credit), there are a lot of confused folks out there.
As far as an EV. No rush, need to get a home charger and still paying off two cars.
There are EVs I like just not enough to buy them NOW NOW NOW.