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Scout EV and Tax Credits

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lefty

Active member
1st Year Member
Feb 7, 2023
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I do not yet own an EV (the Scout will be my first) so was unaware of how the federal EV tax credit works until I came across this article: https://www.cnn.com/2023/08/20/cars/electric-cars-sales-gas-cars-dg/index.html

The article suggests that only ~18% of EVs sold in the US qualify for the federal rebate. Will the parts for the Scout be both sourced and assembled in a way that allows consumers to fully leverage the tax credit?
 
Many EV makers that don't qualify are providing leases with a $7500 EV credit, which I actually prefer to a $7500 tax credit. The lease credit does not depend on you needing a tax credit, so it's more universal and you get it immediately (sans about $800 in lease paperwork fees). They can do this because the leasing company is a commercial operation and, as such, operates under a different set of rules than citizens that allows them to get a $7500 EV tax credit for all EVs they buy without any restrictions. So what they are now doing is just passing the EV credit they get along to you by adjusting the lease terms. (If they don't do that, they are not just getting the money from sourcing the lease but also pocketing the $7500 tax credit they receive for the vehicle..)

Even if you don't want to lease, you can buy out the lease immediately, either with cash or by financing the car (if you do it immediately you can still get a new car loan, as opposed to a user car loan). Many people have been doing exactly this. The only downside, now that interest rates are going back up, is that you can't take advantage of the subsidized car loan rates that manufacturers sometimes provide, though if you plan on buying with cash then it doesn't matter.

Even if the new Scout qualifies for the EV tax deal, I hope they also offer a $7500 credit lease deal.. (Hmmm..though does that work? or could you first lease then buy it out and get the tax credit...? Hmmm...not sure.)
 
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lefty said:
I do not yet own an EV (the Scout will be my first) so was unaware of how the federal EV tax credit works until I came across this article: https://www.cnn.com/2023/08/20/cars/electric-cars-sales-gas-cars-dg/index.html

The article suggests that only ~18% of EVs sold in the US qualify for the federal rebate. Will the parts for the Scout be both sourced and assembled in a way that allows consumers to fully leverage the tax credit?
Click to expand...
I think it would be a major miss if Scout did not plan on building to the standards of the program.
 
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Albal said:
Even if the new Scout qualifies for the EV tax deal, I hope they also offer a $7500 credit lease deal.. (Hmmm..though does that work? or could you first lease then buy it out and get the tax credit...? Hmmm...not sure.)
Click to expand...

Funny but nope, no way to double dip here. The leasing company already claimed the tax credit on the vehicle, so you can't then go on and claim the tax credit as well. If it's done through a lease, I believe the tax credit would reduce the capitalized cost of the vehicle when calculating that lease, so it's essentially like leasing a vehicle that has a $7500 lower sticker price. Is that how it works?

Someone please correct me if I'm wrong, since I've been a bit too busy with work the last few days to actually look into it.
 
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The "up to" $7500 Tax Credit is a very powerful incentive. From personal experience. I was cross shopping Chevy Bolt EUV (qualifies) and Hyundai Kona EV (does not qualify). They're very similar vehicles, but the tax credit moves them far apart in terms of pricing. I went with the Bolt EUV (not just because of the credit, I liked it better overall too, but having the tax credit on top of it, made it an obvious choice).
 
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One problem with a tax credit is that rules for them can change. IIRC, I think the expected release date is 2026 (maybe late 2025) - that is more than an election away, possibly an administration change, guaranteed changes in the congress and senate.

An issue with many current EV's is the same people who can afford them don't qualify for the credits. I hate the idea of leases - but at least they offer an possible option around that. That said, always read the fine print of leases. They can work for many people, but the fine print can also sometimes be dangerous. Perhaps I am paranoid, but I had a client burned for about 50k on a lease (almost 20 years ago). Ok, technically it was a series of 3 leases I guess, but he was still burned.
 
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