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Discussion Starter · #1 ·
The new law (if passed) starts 1/1/23. So I assume the current law expires 12/31/22. I'm guessing we get the full $7500 if we take delivery before then. But, lose $3750 of it if we take delivery next year since at least 40% of the battery components need to be sourced in North America.

 

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Will have to read the language of all of what's currently proposed, but it seems like the 200,000 vehicle cap is removed (good for Telsa/GM/Toyota), but that the car has to be made in North America (bad for Toyota/Subaru/etc), and that there is no longer an extra 4 grand if the car is union-made (this one never really made any sense). It's possible it could end all credits for any foreign-made EVs if/when enacted, but for sure would crimp Tesla's style with the limitations on a max of 55k for cars\80k for trucks and max income levels (150k single for new cars, 75k single for used). Also seems like the 80k would apply for any vehicle that a manufacturer can claim is a "sport utility vehicle", so basically everything with AWD?...


linky to the HR 5376: https://www.democrats.senate.gov/imo/media/doc/inflation_reduction_act_of_2022.pdf
 

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So basically, if Toyota/Subaru keeps dragging their feet on the recall fix and Toyota doesn’t reopen bZ4X/Solterra production in September, looks like the Solterra might not qualify.

Now there is a stipulation that if you placed a “binding” order in 2022 but don’t get delivery until 2023 you can opt for the 2022 treatment of the tax credit. Not sure if this covers those of us that have deposits and orders for the Solterra in already. Hopefully, it does.
 

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This upcoming EV bill sounds like it will be a game-changer for the Solterra. Since it's being built in Japan, the $7,500 credit will go away beginning 1/1/23. Is anyone planning to bail on the Solterra if delivery isn't taken by 12/31? The North American made stipulation throws a HUGE wrench for other EV cars too - like Fisker, Toyota BZ4X, Lexus, etc.

It would be nice if Subaru plans to communicate with those of us who've ordered this SUV if/when this bill gets passed next week. I haven't heard a thing since placing my reservation 3 months ago. The Solterra doesn't even appear on the Subaru.com homepage! The silence is deafening!!
 

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This upcoming EV bill sounds like it will be a game-changer for the Solterra. Since it's being built in Japan, the $7,500 credit will go away beginning 1/1/23. Is anyone planning to bail on the Solterra if delivery isn't taken by 12/31? The North American made stipulation throws a HUGE wrench for other EV cars too - like Fisker, Toyota BZ4X, Lexus, etc.

It would be nice if Subaru plans to communicate with those of us who've ordered this SUV if/when this bill gets passed next week. I haven't heard a thing since placing my reservation 3 months ago. The Solterra doesn't even appear on the Subaru.com homepage! The silence is deafening!!
I’ll definitely bail. I have an ID.4 now and wanted to trade it in for the Solterra (assuming I liked it enough after test driving) as long as I could justify it economically. The tax credit made it so that I’d at least break even on the trade (assuming current used car prices hold). But without the tax credit, I don’t think the Solterra is going to be compelling enough for me to justify spending $7500 more on it than I planned.
 

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This upcoming EV bill sounds like it will be a game-changer for the Solterra. Since it's being built in Japan, the $7,500 credit will go away beginning 1/1/23. Is anyone planning to bail on the Solterra if delivery isn't taken by 12/31? The North American made stipulation throws a HUGE wrench for other EV cars too - like Fisker, Toyota BZ4X, Lexus, etc.

It would be nice if Subaru plans to communicate with those of us who've ordered this SUV if/when this bill gets passed next week. I haven't heard a thing since placing my reservation 3 months ago. The Solterra doesn't even appear on the Subaru.com homepage! The silence is deafening!!
Hi;
the Solterra is on the Subaru homepage. Its under “vehicles” and then “electric and hybrid vehicles”. not very prominently displayed.

i agree that the silence from Subaru is awful. I stopped at a local dealer Tuesday and they told me very optimistically that they will get their demo and customer loaner Solterra in September. Um…good luck.
 

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I’ll definitely bail. I have an ID.4 now and wanted to trade it in for the Solterra (assuming I liked it enough after test driving) as long as I could justify it economically. The tax credit made it so that I’d at least break even on the trade (assuming current used car prices hold). But without the tax credit, I don’t think the Solterra is going to be compelling enough for me to justify spending $7500 more on it than I planned.
I reserved an ID4 in early July after ”wheelgate”, hoping I will get one from the TN factory which I believe has a battery plant nearby. US-made car and battery, I think.

Mt wife has a Forester and it’s a great car, but it seems Toyota and Subaru just phoned this one in…with a lot of static on the line.
 

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Let’s see…. We have a not-yet-passed piece of proposed federal legislation coupled with a not-yet-ready for sale EV, with no assurances of when either will become reality.

Someone almost needs a voodoo witch-doctor and a set of chicken bones to figure out how all of this Is gonna play out.
 

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Discussion Starter · #11 ·
Let’s see…. We have a not-yet-passed piece of proposed federal legislation coupled with a not-yet-ready for sale EV, with no assurances of when either will become reality.

Someone almost needs a voodoo witch-doctor and a set of chicken bones to figure out how all of this Is gonna play out.
We'll likely take delivery this year under the current EV tax credit legislation.
 

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We'll likely take delivery this year under the current EV tax credit legislation.
You sure about that? We're up to a 2.5 month shutdown already. That pushes the "July" deliveries, if any, to October at the earliest. Most orders probably had "August" or later dates, they'd be pushed to November....assuming there's a fix before the plant is scheduled to resume production September 1. Another 1 month shutdown would push those deliveries to December....
 

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Luckily there's a free trade agreement between Japan and the US, so a Solterra with a PANASONIC battery pack might qualify for the tax credit, etc. in 2023.

The existing CATL pack that takes twice as long to charge might be a goner, at least for US-bound Solterras, if Subaru knows what's good for them (sales).

Me, if they can't deliver one to me by the end of the year, I am seriously considering delaying until generation #2. That $7.5k is a lot of money to have to fork over and not get back later.

The equation has definitely changed.
 

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Luckily there's a free trade agreement between Japan and the US, so a Solterra with a PANASONIC battery pack might qualify for the tax credit, etc. in 2023.

The existing CATL pack that takes twice as long to charge might be a goner, at least for US-bound Solterras, if Subaru knows what's good for them (sales).

Me, if they can't deliver one to me by the end of the year, I am seriously considering delaying until generation #2. That $7.5k is a lot of money to have to fork over and not get back later.

The equation has definitely changed.
There’s a trade agreement but not free trade with Japan (Free Trade Agreements). The way the bill is setup the government is forcing manufacturers to move assembly to the US and use mostly US minerals for the battery.
 

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Ah, yes, a closer reading of the pages I had looked at before posting my comment does show exactly that: trade agreement.

Well, Subaru, time to press your government a bit harder.

And silly me, hoping that those Panasonic cells would make it into the US-bound Solterras. Pipe dream.
 

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Discussion Starter · #16 ·
You sure about that?
No. But, I still think it's likely we'll get them (at least those that were initially estimated to be delivered by August) before January 1.

If not, there's language in the bill (Transfer Rule) that says if you have a written binding contract to purchase before the date of enactment, you can treat it as though you put the vehicle into service the day before the date of enactment [January 1, 2023]. So, the old credit would still apply.
 

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It is not a law until signed. So, things can change... but here is what is known so far. I found the information on another forum. Yeah, if I understand it correctly, as written, Solterra would not qualify for any discount which is going to be a point of sale discount, not the tax return after Jan 1, 2023. But, if the sales order is written before the end of 2022 and the delivery happens in 2023, then you can claim the current tax credit of $7500 in the 2023 tax return (2022 income tax form).

What is the chance anyone can close the deal before Dec. 31, 2021? All the lines are shut down for the entire month of Aug.

Senate moves forward with EV tax credit reform; Tesla (TSLA) to be included back and more

New-Vehicle Credit


  1. Manufacturer caps eliminated. (Page 370, line 15)
  2. Credit applies for vehicles purchased beginning January 1, 2023. (Page 386, line 1).
  3. Transition provision for EVs with written sales orders dated in 2022 prior to the date of President signing the bill but delivered in 2023 allows purchaser to claim the “old” credit in 2023. (Page 386, line 20).
  4. Vehicle must be assembled in North America to qualify for new credit. (Page 366, line 15).
  5. North American assembly requirement applies to vehicles sold after the date of adoption of the bill. (Page 386, line 3)
  6. $7,500 credit is broke into two binary pieces meaning the vehicle either qualifies for each piece of the credit or it doesn’t. No longer based on size of battery. (Page 366, line 6)
  7. $3,750 of the new credit is based upon the vehicle having at least 40% of its battery critical minerals from the United States or countries with a free trade agreement with the United States. This is a list of countries with free trade agreements with the US.(Page 371)
  8. The other $3,750 of the new credit is based on at least 50% of the battery components of the vehicle coming from the United States or countries with a free trade agreement with the US. (Page 372, line 13)
  9. The 40% minerals requirement increases to 50% in 2024, 60% in 2025, 70% in 2026 and 80% in 2027. (page 371 line 23)
  10. The 50% battery components requirement increases to 60% in 2024, 70% in 2026, 80% in 2027, 90% in 2028 and 100% in 2029. (Page line 373)
  11. The government has until the end of the year to develop guidance on the battery requirements. (Page 374)
  12. Beginning in 2025, any vehicle with battery minerals or components from a foreign entity of concern are excluded from the tax credit. (Page 374, line 20).
  13. One credit per vehicle. (Page 375, line 12)
  14. Modified gross income limit of $150k for individuals, $225k for head of household, and $300k for joint returns. Definition of MAGI (page 375, line 22)
  15. MSRP of vehicle must be $80k or less for SUVs, Vans and Trucks. $55k for all other vehicles. (Page 377, line 4)
  16. Dealer can apply credit at time of sale. Dealer must disclose to buyer the MSRP of the vehicle, the applicable tax credit amount and the amount of any other available incentive applicable to the purchase. (Page 378, line 6)
  17. Credit terminates December 31, 2032.
 

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Until a fix is determined and implemented, and the assembly line restarts, the possibilities are endless.

Deliveries may start showing up as early as late September…or the fix could still be months longer in coming….. pushing deliveries into 2023. We simply don’t know at this point.

Its anyones guess at the moment, and I suspect both Toyota and Subaru are taking a good, long, hard look at the proposed US legislation attempting to predict what impact it‘s passage may have on the current “pent up” demand for these models in the USA. The last thing either of them will want is a lot of new EV product just sitting on lots somewhere priced at a negative $7500 disadvantage against the competition before even having had as much as being taken on a test drive. If the legislation passes as written, they may simply move their emphasis on product delivery to other areas of the world, and readdress the US market after Toyota has battery manufacturing capacity in NA up and running.

A $7500 surcharge is a lot for many folks to swallow.
 

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Yep. I am giving this whole thing some serious re-thinking.

If they want to use their investment to move forward, I think they are going to need $7,500 manufacturer rebates to incentivize sales in a market becoming increasingly crowded.
 

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Discussion Starter · #20 ·
Yep. I am giving this whole thing some serious re-thinking.

If they want to use their investment to move forward, I think they are going to need $7,500 manufacturer rebates to incentivize sales in a market becoming increasingly crowded.
It may take some time, but I think Subaru and Toyota will shift production of EVs to the U.S. quicker than originally planned.
 
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