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Electric vehicles improve in sales for 2022

Leah Cooper on January 16, 2023

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Electric vehicles:Electric vehicles have become more popular than ever before, and manufacturers besides Tesla are becoming more recognized.

Matt Degen, an editor at Cox Automotive, a website and company devoted to cars, described the situation best.

“It’s not your eyes tricking you,” highlighted Degen.

“For the longest time, the majority of the EVs on the road were Teslas, and they still get the lion’s share of sales.”

“But they’re now hardly the only game in town.”

The numbers

5.6% of the automobiles sold in 2021, according to Kelley Blue Book, were electric vehicles.

Two years ago, only 1.4% of EVs were sold.

Norway was referenced by BloombergNEF expert Corey Cantor in connection to the performance within the global markets.

The 5% market share underlined a crucial turning point for greater adoption.

dBloombergNEF added that markets like China and Europe experience similar changes.

Although plug-in hybrids were listed among the “electric vehicles” by Bloomberg, battery-power vehicles account for the majority of them.

A norm

5% can seem like a little amount, but it could signal the beginning of something becoming common.

For instance, according to Cox Automotive, Hyundai’s overall US market share and the market share for electric vehicles are comparable.

Purchasing a Hyundai doesn’t feel out of the ordinary, and the same is true for electric cars.

However, the main obstacle to buying an electric vehicle is the convenience.

“I think now the demand is definitely there,” said Cantor.

“It’s just been more a supply side of automakers not being able to ship enough.”

Supply & demand

The distribution of parts has been a problem for the entire year 2022 in the global car industry, which has hindered production for a range of vehicles.

The unexpected popularity of a few electric vehicle models caught the manufacturers off guard.

As an example, the 2021 Mustang Mach-E was the first electric vehicle to compete with Tesla sales.

Since then, Ford has had trouble keeping up with demand.

According to Darren Palmer, vice president of electric vehicle initiatives at Ford, every Mach-Es produced by the company was made in response to a specific customer order.

“We could sell it out at least two or three times over,” said Palmer.

“We have held back from launching more global markets because we’re completely sold out.”

The F-150 Lightning is a later version of the F-series pickup truck made by Ford.

The factory where the Lightning is made in Michigan is also being expanded by the manufacturer.

Variety

The selection of electric vehicles on the market has also been expanding.

Eleven electric vehicle models sold more than 1,000 units in 2019, claims Kelley Blue Book.

This year, there were 26 different models.

Hyundai and Kia launched new models for the Hyundai Ioniq 5 and the Kia EV6 even though they already sold electric vehicles.

The R1S SUV and R1T truck were released by Rivian.

General Motors also observed an increase in sales after the Bolt EV and Bolt EUC were brought to the market after a battery fire recall.

The market currently provides electric cars from the premium manufacturers listed below:

Audi
BMW
Genesis
Mercedes
Volvo

“There’s different segments, there’s different price levels,” said Matt Degen.

“It’s not just having to spend $50,000 or $100,000 on an EV anymore.”

According to Tony Quiroga, editor-in-chief of Car and Driver, cheaper electric vehicles have become better as a result of longer driving ranges and faster charging periods.

Additionally winning the 2022 Car and Driver Electric Vehicle of the Year award was the Hyundai Ioniq 5 ($41,000 starting MSRP).

“It’ll go from 10% to 80% on a fast charger in 18 minutes,” said Tony Quiroga. “Which is something that only the luxury brands were doing.”

Inflation Reduction Act

Despite the availability of a wider choice of electric vehicles, it is predicted that EV sales will rise as production problems are resolved.

However, several questions remain unsolved.

According to Jessica Caldwell, industry analyst for Edmunds.com, gas prices may have something to do with the rise in interest for electric vehicles earlier this year.

The recent steep drop in gas prices may make consumers think twice about purchasing electric vehicles next year.

The consequences of the Inflation Reduction Act, meanwhile, remain undetermined.

The terms under which electric vehicles might be eligible for consumer tax credits were changed by the act, which was passed this year.

Furthermore, it establishes a limit on the car’s price based on the buyer’s income.

A few requirements also support indigenous production of the batteries that power electric vehicles.

The question isn’t how many electric vehicles will be eligible, says Corey Cantor, but rather which one.

“So, if a Tesla Model 3 and the Chevy Bolt, and the Tesla Model Y, and a Ford Mach-E and an F-150 Lightning all qualify, those are high volume vehicles,” said Cantor.

Due to their popularity and high sales, incentives may lead to an increase in the sale of electric vehicles.

Reference:

Electric vehicle sales hit a tipping point in 2022

Tax credit for EVs in 2023 leads to confusion

Leah Cooper on January 10, 2023

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Tax credit: In 2023, which is just a few days away, several electric vehicle models from General Motors and Tesla may be eligible for tax credits.

This year, some EVs weren’t eligible for tax credits worth $7,500.

Despite the fact that the change is good, the eligibility might only last a short while.

Limitations imposed by the August Inflation Reduction Act are to blame for the ongoing eligibility.

The Treasury Department announced this week that the Act’s restrictions on newly created tax credits would not immediately go into effect.

As a result, the regulations will be temporarily more flexible in the first few months of 2023 and allow larger tax credits on more EVs.

The rules

According to the US Treasury Department, the limitations on the new tax credits have been postponed until at least March 2023.

The new restriction refers to both the location of the battery pack’s manufacturing and the sources of its minerals.

It also revealed proposed rules that would implement the demands.

According to the terms of the law, the reductions in tax credits will start as soon as the “proposed guidance” is published.

After a three-month period, vehicles may qualify for larger tax credits.

For instance, General Motors claimed that if the full restrictions are in place, their electric vehicles will only qualify for a $3,750 tax benefit.

The company’s vehicles won’t become eligible for the $7,500 tax credit for two to three years.

Downside

The restrictions have a disadvantage in that they will make the regulations ambiguous despite the buying opportunities they would bring in early 2023.

Consumer Reports senior policy analyst Chris Harto expressed his desire for more clarity as opposed to more confusion.

“It seems like things just seem to get more confusing each time they say something,” said Harto.

The proposed tax laws are meant to incentivize automakers to produce their electric vehicles (and their parts) in the US or other countries with which they have trade agreements.

They also make sure that wealthy Americans who buy luxury cars don’t get tax credits.

The most recent announcement undoubtedly benefits customers because it temporarily increases the amount of tax credit money that is available.

Qualifications

The slanted tax credit for early 2023 is one of the Act’s numerous unclear components.

The Chevrolet cars Bolt EV and EUV are now eligible for tax credits for the next year according to revised EV tax credit standards.

Despite having been constructed in North America, they were previously ineligible.

General Motors and Tesla exceeded the 200,000 electric vehicle sales limit for any company under the prior tax credit regulations.

The new regulations, which are connected to the Inflation Reduction Act, will lift the cap.

However, not every customer or electric vehicle will be eligible for credits despite the change.

For instance, there will be pricing restrictions in addition to the requirement for North American production.

A vehicle’s pricing cannot be more than $55,000, while an SUV’s sticker price cannot be more than $80,000.

As a result, at their current prices, the majority of Tesla models (including the Model X SUV, Model S sedan, and Model 3) will not be eligible for tax credits.

Starting in 2023, the Mercedes EQS SUV, which is currently eligible for tax benefits since it is made in the US, would no longer qualify.

“It shuffles the deck as to who’s eligible, and then the deck will get shuffled again when this guidance comes out [in March],” said Chris Harto.

“And it makes a giant mess for consumers, and automakers, and dealers.”

Buyers

Due to the limitations on tax credits, buyers are not allowed to flip.

This suggests that the car must be purchased by the end user.

People who buy cars with the intention of reselling them are not eligible for the credit.

Additionally, there are restrictions on the buyer’s income.

The maximum “modified adjusted gross income” for buyers is $300,000 for a couple filing jointly, $150,000 for an individual, or $225,000 for the head of household.

The restrictions will make it impossible for buyers of high-end electric vehicles to receive tax credits.

According to Andrew Koblenz of the National Automobile Dealers Association, the best thing purchasers can do is find out if the vehicle they are thinking of buying is qualified for the tax credit.

Similar-looking SUVs bought from the same dealer might not be qualified for the same level of credit due to the fact that some models are produced in numerous factories.

“It’s a great time to be shopping,” said Koblenz.

“It’s great that there will be more vehicles eligible now, but you’ve still got to make sure the one you’re interested in is eligible.”

“You need to ask your dealer and your manufacturer that question, and you’ve got to make sure that you qualify too.”