[BoxerPwr]

It's too bad the Solterra won't be eligible for the tax credit, I do get their reasoning if it doesn't make financial sense for them but I wonder if this is going to affect people's interest in the Solterra compared to other EVs.

 

[SubiGuy]

It's too bad the Solterra won't be eligible for the tax credit, I do get their reasoning if it doesn't make financial sense for them but I wonder if this is going to affect people's interest in the Solterra compared to other EVs.

I think most won't hesitate to buy a Tesla Model Y, another equivalent EV, a hybrid, or just about anything else electrified that's much more appealing overall and easy to get.

BTW, this YouTuber brought up some good points.

 

[potato]

I think you accidentally a word in the title

 

[ChasingCoral]

Subaru won’t build electric cars in the US because it can’t compete with McDonald’s wages
Fred Lambert
- Nov. 4th 2022 3:17 am PT

@FredericLambert

Subaru said that it has no plan to build its electric cars in the US because it claims it can’t compete with McDonald’s $20-an-hour starting wage.

Since the reform of the federal tax credit for electric vehicles in the US was announced, we have reported on over a dozen announcements from foreign automakers investing in EV production in the country.

It’s due to the new federal tax credit, which includes a protectionist clause that forces automakers to produce EVs in North America to get access to the $7,500 incentive.

The incentive is significant enough that in some lower-end segments, it will be hard to compete without it.
However, we now learn that it is not enough to convince Subaru to invest in electric vehicle production in North America. The reason behind the decision is quite surprising.

In comments about it during the company’s latest financial results release, CEO Tomomi Nakamura said that Subaru is currently not considering building an electric car plant in the US because it can’t compete with McDonald’s wages (via Auto News):

In Indiana, part-time workers at McDonald’s earn $20 to $25 per hour, which is in competition with what temporary workers make at our plant. If we were to build a new plant, it would be very difficult to hire new people for that. Labor costs are rising now. It is quite challenging for us to secure workers for our Indiana plant, including those of suppliers.

Subaru currently operates a vehicle assembly plant in Indiana, where it employs about 6,000 workers to produce the Ascent, Impreza, Legacy, and Outback models.

The automaker only has one electric vehicle for sale, the Subaru Solterra, but it is in partnership with Toyota and basically the same vehicle as the bZ4X.

Like some of its Japanese peers, Subaru is seen as a laggard when it comes to the transition to electric vehicles. It currently only plans to have its own dedicated EV production in 2027 with a new plant in Japan.

Electrek’s Take
I understand that the labor shortage is an extremely difficult situation to navigate right now. That said, I’m not impressed by Subaru’s reason to not produce EVs in North America.

The automaker really can’t figure out how to pay workers more to produce a complex $45,000 product than workers making $5 hamburgers? That’s too difficult of a problem for them?

If it doesn’t work, Subaru is going to have a very tough time competing during the electric shift. The automaker might as well give up on the North American market in about three years if it can’t expand its EV offering.

 

[FelineFreddie]

As much as I dislike saying it, I’m in full agreement with the Electrek‘s Take conclusions.

What I read into it is that Subaru is going to continue riding on Toyota’s coat tails in the EV production plan for the near-term future. We’ll see how all that works out for them

 

[FelineFreddie]

Meanwhile…Hyundai and Kia seem to be able to make it work…

South Korea seeks 3-year grace period on U.S. EV tax incentive law

 

[frankamartin]

You can earn $20 to $25 per hour at McDonalds? Really!

 

[FelineFreddie]

Well, you can be guaranteed Mexico doesn’t pay that kind of wage, and last I checked, it’s in NA.

How's it that other vehicle manufacturers seem to be able to manufacture profitably here?

The $ amount for wages sounds like a bit of a smokescreen covering the reasons, to me…

 

[frankamartin]

The $ amount for wages sounds like a bit of a smokescreen covering the reasons, to me…

I think that is an understatement.

Subaru is selling 5,390 vehicles per month in California for the first half of 2022 (out of ~45,000 per month in all of USA). If we calculate 35% of that amount that is 1887 per month. CARB wans 35% by 2026. Subaru will have to basically sell nearly every Solterra they produce in California to reach 1887 per month, and it will be a very tough sell without the $7500 tax incetive. Subaru may have to price them at a point where there is almost no profit. Subaru may simply have to pull out of California if they are facing large state imposed penalties.

Audi, BMW, Stellantis , Ford, General Motors, Honda, Hyundai, Kia, Mazda,Mercedes Benz, Nissan, Toyota, and Volkswagen all have plants in Mexico. Automotive manufacturers are primarily concentrated in the northern region of Baja California, Sonora, Chihuahua, Coahuila, Nuevo León, and San Luis Potosí.

 

[DRM]

It is important to check your state. Oregon has up to a $7500 rebate and that is cash, not a tax credit. It is structured in some ways opposite of the Federal system in that the full amount is only available to lower income and lower cost cars. The income threshold is 4 times the poverty rate, which for an individual is about $54K, and requires getting an IRS transcript. The vehicle threshold is $50K, but that is not purchase price, is is " base manufacturer’s suggested retail price of less than $50,000". But does base mean for your trim or the most basic trim? I do not know. There is no country origin requirement. I wonder if the vehicle threshold is indexed. California has a rebate too, but I think it is smaller.