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Manchin's vote now enables $1.9T Build Back Better bill to become law. Why this sucks for Nissan (and us!)

6915 Views 90 Replies 18 Participants Last post by  improvius, 
Nissan79
As I'm reading more about Manchin's turnabout that now enables the Build Back Better bill (which most certainly will then become law), I've found some very important elements that really throw a wrench at all of us waiting for our Ariyas.

Here's the details (cut/paste from here). My comments are in red below.

In summary, Build Back Better helps anyone who is planning to purchase a Tesla, and helps some Ford EV, and most GM EV purchasers; but it specifically hurts (or at least dramatically complicates) the ability for buyers of the Nissan Ariya to now claim the $7500 EV tax credit.

New Vehicle Credit
  1. Manufacturer caps eliminated. (Page 370, line 15) For all of us with the current preorders, this was is not relevant because we already were going to be within the 200,000 unit cap.
  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). This appears to suggest that we can still get access to the 'old' (pre-Build Back Better) credit of $7500, but only if you figure out how to navigate this "transition provision", which previously wasn't necessary. This (in my opinion) makes what was already complicated, now even more complicated if you are buying a non US-made EV like the Ariya, that already was within the 200,000 EV credit unit cap)
  4. Vehicle must be assembled in North America to qualify for new credit. (Page 366, line 15). US-bound Ariya's are all built in Japan, so they won't qualify for the 'new' credit (which is the same as the old one of $7500, but isn't capped at 200,000 units)
  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.

NOTE: I'm posting this fairly quickly and haven't read through everything else, but so far I am not liking what I'm seeing. Nissan appears to be getting screwed on this deal.
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atreis
I think mine should arrive this year (Premier trim, Copper color, 12xxx reservation number), so that would make this moot for me, but I think #3 is our out on the US-produced provisions. Those who want the credit will most likely need to keep their reservation details with dates so that they can be sure and claim the grandfathered-in old credit.
While not necessarily great for Ariya reservation holders that don't get their cars until 2023, the changes are ones that make sense for the country overall.

I'd also like to point people to #14 and #15 too. Income and purchase dollar value caps that are bound to affect some people here (although not me personally).
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Nissan79
atreis said:
I think mine should arrive this year (Premier trim, Copper color, 12xxx reservation number), so that would make this moot for me, but I think #3 is our out on the US-produced provisions. Those who want the credit will most likely need to keep their reservation details with dates so that they can be sure and claim the grandfathered-in old credit.
While not necessarily great for Ariya reservation holders that don't get their cars until 2023, the changes are ones that make sense for the country overall.

I'd also like to point people to #14 and #15 too. Income and purchase dollar value caps that are bound to affect some people here (although not me personally).
Click to expand...
Yes, item 3 is suggesting that if we are able to take delivery by a certain date relative to whenever this bill goes into law (with that itself being a presumption), then we should still be able to get the $7500 tax credit without concern for where the car was built.
The problem with that is, we know that the AWD version (like the Platinum+ I ordered) aren't being delivered until the early part of 2023, which may in fact be after the laws regarding the "new" credit criteria activate... that's why I said that this law further complicates what was already a complicated situation for Ariya EV buyers.

And additionally, I've read more details regarding the specific requirements in items 7 and 8, and it appears that this is a new provision with a purposely high bar - perhaps too high for most EV's sold now and in the near future to even qualify for!.

The point of this thread was to encourage discussion on this topic, since it's breaking news. I haven't had alot of time to really dig into it and sort out the fact from fiction, but with the 30 minutes or so I've spent investigating this, this legislation feels like a wolf in sheeps clothing (or at least a bait and switch).
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V
This credit doesn't benefit Tesla and Ford as much as you think. Tesla batteries are source in places that aren't free trade countries (except Australia) so the Model Y may only get half-credit at best. The cheapest Model 3 RWD use a China-based LFP battery so at most they'd get half the credit also.


Ford Mach-E batteries are LG Chem Poland made. GM is probably the bigger winner as they have battery plants in the US now but the materials aren't sourced from the "correct" countries and so GM will have to adjust their supply chains a little.
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atreis
voxel said:
GM is probably the bigger winner as they have battery plants in the US now but the materials aren't sourced from the "correct" countries and so GM will have to adjust their supply chains a little.
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And Nissan, but at present, only for the Leaf. The Leaf is assembled in the US, and uses US-made batteries, but supply chains may have to be adjusted.
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S
This new bill certainly complicates my EV purchase. I have a reservation for an AWD Ariya which would likely be delivered in 2023. Is my reservation a "written sales order"? Which federal government department decides on that matter? I am above the $75k income level and without a feasible price reduction afforded by an applicable tax credit I will not be purchasing a car priced at $55k-$60k, which is the typical cost for an AWD EV.
My 2018 VW Tiguan SEL Premium AWD gets me around with a fair amount of efficiency. I understand the need to protect the environment but if the government is going to take my taxes but is not going to help me with the EV purchase then I would have no choice but to continue with my ICE vehicle.
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Sonofvi said:
This new bill certainly complicates my EV purchase. I have a reservation for an AWD Ariya which would likely be delivered in 2023. Is my reservation a "written sales order"? Which federal government department decides on that matter? I am above the $75k income level and without a feasible price reduction afforded by an applicable tax credit I will not be purchasing a car priced at $55k-$60k, which is the typical cost for an AWD EV.
My 2018 VW Tiguan SEL Premium AWD gets me around with a fair amount of efficiency. I understand the need to protect the environment but if the government is going to take my taxes but is not going to help me with the EV purchase then I would have no choice but to continue with my ICE vehicle.
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Again, the bill is forcing you to "Buy American" while saving the environment.

Honestly, after my test drive... the Ariya is a pretty good value at the prices without the tax credit. The one-step above base trim is better than the TOP trim of the VW ID.4 ($52K Pro S Gradient). I declined the ID.4 AWD last weekend because I found the interior + infotainment to be super basic. The ID.4 truly felt like a $32K RAV4 whereas the Ariya is quite posh. Also.. the upper trims of the Ariya have 360 camera, digital rear view mirror, hands-free driving, etc. that even the no trim of the ID.4 has.
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The Ariya is an attractive car with great technology but it only has a few features that my current car does not have. The main features in the Ariya AWD but not in the Tiguan SEL Premium AWD are:
1. Electric motor (and its benefits to the evironment)
2. Semi-autonomous lane changing.
3. A better lane-keep system (probably)
4. Digital rear-view mirror (useful but not a game changer)
5. Wireless Apple carplay(but I use Android so this is of no benefit to me)
6. Lower cost of ownership but only if I keep the same car for 8-12 years, depending on usage.

All of the above (and some areas where the Ariya is not better than the Tiguan) comes at the added cost of about $20k+ before the $7,500 tax rebate.

None of the above takes into consideration that I already fully own the Tiguan and would not have to deal with a new car loan at whatever the new interest rate would be in the current economic environment.

As reference, some of the technology on my my current Tiguan include, adaptive cruise control, Lane-keep, front and rear traffic sense, autonomous breaking, area-view camera, digital cockpit, wired Apple and Android carplay, etc.

So, yes, I would like to contribute more to a better environment, but without the tax rebate the $20k+ as an additional entry cost is a bridge too far. "Pretty good value for money" may be an emotional conclusion.

Pretty good value for money is the ID.4, in my opinion, but I do agree that the US version lacks the technology available in some European versions. I canceled my ID.4 reservations a few months ago because the AWD version is technologically not better than my Tiguan, except that the ID.4 is powered by electric motors.
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Sonofvi said:
The Ariya is an attractive car with great technology but it only has a few features that my current car does not have. The main features in the Ariya AWD but not in the Tiguan SEL Premium AWD are:
1. Electric motor (and its benefits to the evironment)
2. Semi-autonomous lane changing.
3. A better lane-keep system (probably)
4. Digital rear-view camera (useful but not a game changer)
5. Wireless Apple carplay(but I use Android so this is of no benefit to me)
6. Lower cost of ownership but only if I keep the same car for 8-12 years, depending on usage.

All of the above (and some areas where the Ariya is not better than the Tiguan) comes at the added cost of about $20k+ before the $7,500 tax rebate.

None of the above takes into consideration that I already fully own the Tiguan and would not have to deal with a new car loan at whatever the new interest rate would be in the current economic environment.

So, yes, I would like to contribute more to a better environment but without the tax rebate, $20k+ as an additional entry cost is a bridge too far. "Pretty good value for money" may be an emotional conclusion. Pretty good value for money is the ID.4, in my opinion, but I do agree that the US version lacks the technology available in some European versions.
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I think you are too focused on the environment (I barely give a hoot) with EVs. EVs are qualify of life product. The drivetrain is MUCH smoother than ICE. Stop and go traffic with ICE cars is generally unpleasant. EVs have instantaneous AC and heating which few talk about - along with instant torque. EVs are also quiet and vibration/noise is often lower.

The ID.4 is just a budgety SUV. Fine if you are looking for a basic SUV with crap audio that drives from A to B with zero excitement. It's crazy to think the base trim cost $42K (before credit) because it's $15K+ overpriced and basically equivalent to a barebones RAV4. If I'm spending $42K again.. it will be another RAV4 Prime.

I do think EV's competition is not other EVs but quality ICE cars as you hinted with your Tiguan comparison. I have a Kia Telluride that better than all the EVs I've owned (ID.4, Mach-E, Model Y, MINI electric) and PHEV (RAV4 Prime). It's loaded with features (ventilated seats, 360 camera, sensors up the wazoo) I wish my EVs had and also has great visibility and massive room. The cabin isolation is incredible even compared to EVs(I measured dB levels). I call it a "land yacht". The negative is that city traffic driving is not fun with the Telluride. For short city commuting, I will always prefer an EV.
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voxel said:
I think you are too focused on the environment (I barely give a hoot) with EVs. EVs are qualify of life product. The drivetrain is MUCH smoother than ICE. Stop and go traffic with ICE cars is generally unpleasant. EVs have instantaneous AC and heating which few talk about - along with instant torque. EVs are also quiet and vibration/noise is often lower.

The ID.4 is just a budgety SUV. Fine if you are looking for a basic SUV with crap audio that drives from A to B with zero excitement. It's crazy to think the base trim cost $42K (before credit) because it's $15K+ overpriced and basically equivalent to a barebones RAV4. If I'm spending $42K again.. it will be another RAV4 Prime.

I do think EV's competition is not other EVs but quality ICE cars as you hinted with your Tiguan comparison. I have a Kia Telluride that better than all the EVs I've owned (ID.4, Mach-E, Model Y, MINI electric) and PHEV (RAV4 Prime). It's loaded with features (ventilated seats, 360 camera, sensors up the wazoo) I wish my EVs had and also has great visibility and massive room. The cabin isolation is incredible even compared to EVs(I measured dB levels). I call it a "land yacht". The negative is that city traffic driving is not fun with the Telluride. For short city commuting, I will always prefer an EV.
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I hope you drove the Tiguan before you arrived at your conclusion. 😁
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Sonofvi said:
I hope you drove the Tiguan before you arrived at your conclusion.
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Once you driven an EV it’s hard to go back to noisy janky-shifting gas cars. Cars like the RAV4 Prime are a gateway drug to EV hood. You hear owners drive solely in EV mode and fill the gas tank once every 10,000 miles.

The only reason Iike the Telluride is the 3.8L V6 with 8 speed which is butter smooth on the highway. What would be even better is 5L V8 :)
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improvius
Sonofvi said:
I am above the $75k income level
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What $75k income level?
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improvius said:
What $75k income level?
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The income level to qualify for the credit is $150,000 (filing tax as single) and $300,000 (for couple) see page 376. The EV potion starts on page 366.

https://s3.amazonaws.com/wvmetro-uploads-prod/2022/07/Inflation-Reduction-Act.pdf
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D
Gist of the questions seems to be:

Does a reservation qualify as a sales order?

Me? I think I'd best go visit my dealer and ask for a sales order... :)
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improvius
It seems like there's some confusion about when the proposed changes take effect. In reading the bill itself, it looks pretty clear to me that the "Final Assembly" requirement takes effect IMMEDIATELY when the bill is signed into law. Depending on when this happens, this could potentially affect everyone here regardless of whether your Ariya can be delivered in fall 2022 or spring/summer of 2023.

The only way around this is obtaining a "written sales order" so you can qualify for the transitional grandfather-ing. I asked Nissan customer support about this, and they said I'd have to talk to the local dealership.
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Nissan79
improvius said:
It seems like there's some confusion about when the proposed changes take effect. In reading the bill itself, it looks pretty clear to me that the "Final Assembly" requirement takes effect IMMEDIATELY when the bill is signed into law. Depending on when this happens, this could potentially affect everyone here regardless of whether your Ariya can be delivered in fall 2022 or spring/summer of 2023.

The only way around this is obtaining a "written sales order" so you can qualify for the transitional grandfather-ing. I asked Nissan customer support about this, and they said I'd have to talk to the local dealership.
Click to expand...
Yes this is how I read it as well. Unfortunately this really is a shame that US law is purposely being written in such a way to benefit a very specific auto manufacturer that likely had the deepest pockets and most engrained lobbyists.

This really muddies up the waters and will likely confuse the dealerships even more than they are already confused by EV's today. Thus isn't just a problem for us; it will affect the majority of EV manufacturers who currently have car deliveries in the pipe.

I suspect that this will make it even harder to negotiate on price at the Nissan dealership. I'm not sure I have the patience or time/energy to go deal with all of this. It just feels like the whole situation is becoming corrupt.
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improvius
Nissan79 said:
I suspect that this will make it even harder to negotiate on price at the Nissan dealership. I'm not sure I have the patience or time/energy to go deal with all of this. It just feels like the whole situation is becoming corrupt.
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Maybe. But if the dealership tries to gouge me, I'll be inclined to drop the reservation right before delivery. And by that time the $7500 credit may be impossible to attach to it. I don't know how well these things will sell once that incentive is gone.
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K
I agree that Nissan will take a huge hit on sales without the incentive, especially from reservation holders. The $7,500 is a big factor in why I’m buying now instead of waiting a year or two.
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Nissan79
kraanbalk said:
I agree that Nissan will take a huge hit on sales without the incentive, especially from reservation holders. The $7,500 is a big factor in why I’m buying now instead of waiting a year or two.
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Yes same for me. That $7500 used to be in my top five reasons why I had settled on the Ariya over say, the Lyriq, or a Tesla. Now I'd say it's probably in the top two... And it's kinda funny - it's not that I'm really price sensitive... it's more about the fact that I feel like the $7500 was always part of the deal. If that suddenly becomes "not part of the deal", then I'll just walk away and keep driving gas vehicles.
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Sonofvi said:
This new bill certainly complicates my EV purchase. I have a reservation for an AWD Ariya which would likely be delivered in 2023. Is my reservation a "written sales order"? Which federal government department decides on that matter? I am above the $75k income level and without a feasible price reduction afforded by an applicable tax credit I will not be purchasing a car priced at $55k-$60k, which is the typical cost for an AWD EV.
My 2018 VW Tiguan SEL Premium AWD gets me around with a fair amount of efficiency. I understand the need to protect the environment but if the government is going to take my taxes but is not going to help me with the EV purchase then I would have no choice but to continue with my ICE vehicle.
Click to expand...
Personally I’m not going to fret about the details of a senate bill that continues to be massaged combined with at least one senator that might stand in the way of its passage. Even if this bill were to pass as discussed in this forum I contend as I file my taxes with the IRS that my Ariya reservation will be my “grandfathered” sales order. ie my reservation is an official document from the manufacturer that verifies my down payment, sales price, and the date I reserved my EV.
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