Observed EV tax credit market distortion

[Brons2]

Bolt EUV - I have looked at these recently and the 2022s are actually more expensive than the used 2023s. The tax credit is of course available on the 2022s.

An influencing factor might be that Hertz is selling off lots of 2023 Bolt EUVs pretty cheap.

But yeah, that said, is the tax credit really just boosting dealer/manufacturer profit margins, and not actually helping consumers adopt EVs? I would say at this point, the market is more fully developed. If these are all revoked in the likely next administration, it will be interesting considering the state EV adoption mandates in certain states.

 

[BMWTurboDzl]

Depends on whether the automaker allows the dealer to sell over MSRP but ya the credit is probably even baked into the MSRP.

 

[Torrid]

I would assume the same as well. $7500 isn't a small chunk of change at 1/4-1/5 the MSRP of the car.

 

[Analog-1]

Depends on whether the automaker allows the dealer to sell over MSRP

Auto makers have no control what dealers add on to the price of new vehicles. They are a third party and can choose to sell at what ever price they see fit. Now the consumer can very easily just say NO.

 

[BMWTurboDzl]

Auto makers have no control what dealers add on to the price of new vehicles.

That's up to the automaker.

 

[Brons2]

Depends on whether the automaker allows the dealer to sell over MSRP but ya the credit is probably even baked into the MSRP.

That's another point. When Ford lost the tax credit on the Mach-E, they re-stickered them $7500 lower. Ours had the original sticker on it, it was north of $55K. It had a secondary sticker that looked like a photocopy that stated $47K and change.

Had a dealer discount and a lease credit on the hood when we got it, but still, that $7500 was pure profit for the Mach-E. Or a lessened loss at any rate, as I hear they lose money on these things.

 

[Brons2]

Auto makers have no control what dealers add on to the price of new vehicles. They are a third party and can choose to sell at what ever price they see fit. Now the consumer can very easily just say NO.

They do set the MSRP, which in our case was reduced by $7500 after they lost the tax credit (see prior post) There was an additional $3000 dealer discount and $10,500 on the hood. In the end Ford and the dealer collectively got $21000 less for this car than they originally thought they could get. I'm happy, they're probably not to some degree, but I'm sure they were happy to get a 2023 off the lot when it was already Summer 2024.

 

[JohnnyJohnson]

Bolt EUV - I have looked at these recently and the 2022s are actually more expensive than the used 2023s. The tax credit is of course available on the 2022s.

An influencing factor might be that Hertz is selling off lots of 2023 Bolt EUVs pretty cheap.

But yeah, that said, is the tax credit really just boosting dealer/manufacturer profit margins, and not actually helping consumers adopt EVs? I would say at this point, the market is more fully developed. If these are all revoked in the likely next administration, it will be interesting considering the state EV adoption mandates in certain states.

Trust me Hertz is selling them for a reason!

 

[Brons2]

Among EVs in the marketplace, Bolts make poor rental cars because of their low DCFC rate of 55KW. But most people who own Bolts are happy with them from what I have learned from talking to people who own them.

That said, if this is just the usual low rent anti-EV comment, it's too late, I have already turned to the dark side.

 

[Analog-1]

That's up to the automaker.

Automakers control MSRP and incentives nothing more. Any dealer can ask what they want above or below that. As we have seen for the last three years now. Price mark ups useless addon's and addendums. Ford even informed there dealers during the pandemic to stop selling so high. The dealers did not stop and there was nothing Ford could do.

 

[Torrid]

Trust me Hertz is selling them for a reason!

Hertz sells everything. This isn't some knee jerk reaction. I've seen the mileages some of these cars have been coming out of there with. They've got a lot of miles. I worked with Hertz for 10 years and then worked with them for 1 year after that when they bought my company out. My job was to install equipment in many cars and then remove it before the cars go to auction or the sales lot. It's a constant process. They bought a lot of EVs all at once and not surprisingly the time limit went up on those car all at once. I haven't worked there in 8 years now. They had Teslas back then too, just not as many.

It's amazing what the news can put out to bend a story. It's like making news when they sold a bunch of Altimas and bought mostly Malibus and Impalas as their replacement. That was just the cycle they went through. I've said many times I don't think EVs benefit the rental car company or the renter. These cars will predominantly see public charging in the hands of renters, so they aren't saving money on fueling costs.

 

[Torrid]

Automakers control MSRP and incentives nothing more. Any dealer can ask what they want above or below that. As we have seen for the last three years now. Price mark ups useless addon's and addendums. Ford even informed there dealers during the pandemic to stop selling so high. The dealers did not stop and there was nothing Ford could do.

On top of that I've heard threats of pulling licenses from dealers, but I've never seen a manufacturer follow through. That would make for a lot of bad blood.

 

[BMWTurboDzl]

Automakers control MSRP and incentives nothing more. Any dealer can ask what they want above or below that. As we have seen for the last three years now. Price mark ups useless addon's and addendums. Ford even informed there dealers during the pandemic to stop selling so high. The dealers did not stop and there was nothing Ford could do.

Automakers control allocations.

 

[Analog-1]

Of course they do. They build them.

 

[BMWTurboDzl]

Right which how they can discourage dealers who are adding markups over MSRP.

 

[Analog-1]

Discourage yes. But have zero control to stop it. Sure they could with hold allocations but that only hurts the automakers bottom line.

 

[LDB]

My dealer never adds anything to any vehicle. Period. And has 7 brands available. Might not be any discount off Monroney price if it's a hot model but never anything above sticker.

 

[Torrid]

My VW dealer doesn't either. I can't say that for most dealers I see.

 

[alarmguy]

But yeah, that said, is the tax credit really just boosting dealer/manufacturer profit margins, and not actually helping consumers adopt EVs?

of course, the tax rebate money is going to the manufacturer through the consumers hands

 

[alarmguy]

Automakers control MSRP and incentives nothing more. Any dealer can ask what they want above or below that. As we have seen for the last three years now.

that depends on the franchise agreement. Products all around the world set pricing from the manufacturer and retail price must be adhered to.
One tiny example would be apple products, no one is allowed to undercut the price of an apple product without Apple’s permission and nobody can add onto the price this goes for all Apple authorized dealers