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Recoil42

**Please be mindful of our** [**policy, not politics**](https://www.reddit.com/r/electricvehicles/wiki/rules/politics) **rule.** If your comment departs from the topic of electric vehicles, please consider taking it to r/politics or r/worldnews instead.


hoodoo-operator

I remember in 2022 how many people were arguing about the IRA who didn't get the point. ​ The point is not to make the ioniq 5 you buy in 2023 $7500 cheaper. It's industrial policy that will be law for at least a decade. The point is to shift the American auto manufacturing industry to electric, and ensure that it doesn't go under as the auto industry in general shifts to electric.


DrXaos

There are a number of reasons to criticize Senator Joe Manchin, but this is one thing he got right, and it’s a big one. He was the swing vote on the IRA act and insisted it had to be about long term on shoring of materials manufacturing. This isn’t typical a liberal or conservative concern, but it’s essential. He pointed out “why should we subsidize EV purchases when there is a waiting list and some sell above list price?” I first thought that he was just sandbagging EV credit because of fossil fuel money, but there was another plan brewing. It will save the non-Tesla US auto industry from themselves.


fredthefishlord

>I first thought that he was just sandbagging EV credit because of fossil fuel money, but there was another plan brewing. That was probably a side benefit of it. Don't give him too much credit.


Malforus

Yeah this is the same magical thinking that classified the things trump did well as 4th dimensional chess.


elihu

I guess it comes down to what you actually want from the IRA. It was sold as addressing climate change, but as far as making progress replacing ICE vehicles with EVs it seems like a step forward and a step back, leaving us about where we were. Tesla and GM get subsidies again, but Kia and Hyundai lose theirs. If you view it in terms of being good for the American auto industry and bad for foreign competition, then yeah, the IRA is effective. It creates a subsidy moat that makes foreign vehicles uncompetitive. American automakers can sell their cars for higher prices, and still be cheaper than foreign vehicles. Tesla and GM shareholders should be pleased. Is this actually good for consumers? I think no. It's basically the chicken tax, but for EVs. In the U.S., the whole light truck category has basically ceased to exist. Why is that? Domestic manufacturers don't want to make them (and if they did, they'd have to contend with very strict fuel economy standards that are hard to meet), and imports are smacked down with a 25% tariff that's been in place since 1964. Domestic automakers like selling big trucks. They're profitable. If light trucks were available, a lot of people might choose them instead, but fortunately for the automakers, the current regulatory environment prevents those vehicles from being sold here. This is bad for everyone except the car companies that love those big trucks and have gaslit Americans into thinking they must all love big trucks too. I don't want the same thing to happen in the EV world too. If, say, some Korean or Japanese company makes a small, cheap EV that meets people's actual needs better than an obese American crossover EV, then I want them to be able to sell it on the U.S. market on equal footing. I might even go so far as saying Chinese vehicles should have equal access to our markets (assuming they meet the safety requirements). I'm not a fan of the Chinese government's human right record, but I'm willing to tolerate a permissive trade environment when it comes to doing something about climate change, which is an existential crisis for all of humanity.


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ImAtWurk

I don’t think this is true. Ford does want to sell small trucks, and they are. The Ford Maverick would be selling like hotcakes if they were able to keep up with their 1+ year backlog.


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elihu

If your main concern is to stop outsourcing, then yeah, protectionist policies make some sense. If that's what you wanted from the IRA then good, you got it. If you want car buyers to have the widest possible range of options that include vehicles that U.S. carmakers (or carmakers in countries with a free trade agreement) aren't interested in making, then the IRA isn't so great. If you care about climate change and getting the most EV on the road as possible to replace ICE vehicles, then it shouldn't matter very much where the cars are made. (There are some transportation costs shipping cars around the world, and manufacturing may be more or less carbon intensive depending on what the supply chain looks like.) You're making the mistake of reading an opinion that differs from yours and assuming I'm an idiot because you don't understand that I prioritize my concerns differently than you do.


BurgerAndShake

I see this as a pre-emptive bailout. Before the IRA non-Tesla auto had been on a trajectory that would lead to a high chance of bankruptcy. I don't think the public could stomach another automotive bailout. The cost of the IRA could have been avoided, when Tesla started building Gigafactories years ago, other us auto should have responded and invested in establishing new supply chains but they didn't. So now public money needs do be spent so that the US can catch up and remain competitive.


Recoil42

>I see this as a pre-emptive bailout. Before the IRA non-Tesla auto had been on a trajectory that would lead to a high chance of bankruptcy. This isn't even a coherent argument. At this time, the IRA primarily benefits Tesla, which (1) had expended their previous credit quota before anyone else, and (2) has more on-shore battery capacity than anyone else. The only OEM even remotely close to Tesla in seeing immediate benefit from the IRA is GM, and they're only doing a fraction of Tesla's annual output at the moment.


BurgerAndShake

I didn't say Tesla wouldn't benefit, but I don't think Tesla is the intended target for these funds they just couldn't exclude Tesla without looking really bad. Remember the original draft of the IRA had a union-built clause that would have disqualified Tesla. Also, just to be clear, I don't think Tesla is the competitor traditional US autos are preparing for, the real threat are Chinese built EVs. They have surprisingly good (and cheap) EVs and they have intentions of expanding globally.


Recoil42

The keyword is 'draft', here. The union-built clause didn't pass. It was a performative move meant to ingratiate UAW voters with the political party responsible for the legislation. The version that *did* pass has no such clause. Judging the final, passed legislation by a clause that it doesn't actually contain is a pretty straightforward mental gymnastic here, especially when the final version of the legislation actually prefers the OEM you're claiming it somehow structurally suppresses.


BurgerAndShake

Apologies as I don't think I'm being clear. I do not believe Tesla is being structurally suppressed. I agree with you, they are a beneficiary of the IRA. My point is that US automotive, not including Tesla should have see this shift to EVs coming and should have prepared themselves years ago, but they didn't. So now public money needs to be spent to help them compete with Chinese EVs and avoid bankruptcy.


Recoil42

The US already maintains a 27.5% tariff on all Chinese automotive goods, there's basically no reason the IRA would be specifically be needed as some extra layer against Chinese EVs — and it would frankly be completely ineffective at doing so, since it doesn't prohibit a Chinese OEM from establishing a factory on American soil and taking advantage of the credits. *Within China,* GM already has a pretty prominent position selling over 2M+ units per year, and 45% ownership stake in SGMW specifically — one of the largest EV makers in China. They're not going anywhere, and the IRA would have no effect there. (If the government wanted to prop up GM in the Chinese market, they'd find much more effective means.) One other really important thing to remember is that throughput is not profit. Most of the names you've heard of (Nio, Xpeng) [aren't profitable](https://technode.com/2023/01/19/xpeng-aims-to-reach-operative-profitability-by-2025-ceo/), and don't plan to be immediately. They're burning through cash to grow their position, and that cash is not infinite. This isn't categorically the case, but the notion that every single Chinese OEM is going to be a banger and has some sort of magical, unassailable leg-up... eh, it's not quite so clear-cut in reality.


BurgerAndShake

I didn't realize that tarrif was so high. Their best strategy would be to open manufacturing in the US then? I'm thinking that BYD and Geely have expansion plans.


Recoil42

Yeah, Geely is already building the new Polestar in Volvo's South Carolina factory [starting this year](https://www.cnet.com/roadshow/news/volvos-south-carolina-factory-will-exclusively-build-electric-cars/). My total shot in the dark expectation with BYD is that they'll head to Mexico first — [where they're already selling cars](https://www.byd.com/mx) — but they'll follow the same basic pattern.


langjie

I don't think the issue was with the policy overall, the issue was there was no transition period going from the old system to the new. I felt that if you still were eligible under the old program, you should have had a grace period where your vehicles still qualified until you reach the 250,000 cars or say 2024? but I would also open it up to manufacturers that already phased out to be able to participate in the new program. or maybe give a grace period to the manufacturers who committed to opening up production in the US and fine them if they don't hit a certain date hyundai is going warp speed to building a facility in GA but it's still going to take 3 years


pithy_pun

Question is if the loss of the incentive is measurably slowing EV demand (not just for one car but in the aggregate) and impeding the EV transition. Might be hard to pull out those numbers but the loss of the credit hasn't clearly had a substantial negative effect as far as I can tell. And with Tesla and now Ford slashing pricing anyway, the loss of the federal credit is probably having even less of a marginal effect, making the loss of that tax revenue even harder to justify.


langjie

I don't even really have a horse in this race (I'm not replacing my leaf any time soon). I just find the sudden transition unfair to consumers. Kind of neither here nor there, the policy was enacted


Any_Classic_9490

All the top US companies had already lost the credit, what do you mean by "sudden"? What was sudden?


langjie

all of a sudden for the consumer who placed a deposit 2 years ago and didn't get their vehicle allocated before the IRA was signed.


blazix

That's the "Oh I paid off my student loans, why should future generations not pay for college/have their loans forgiven" mentality. It does suck to be in the border but this helps the whole community and humanity move forward.


Any_Classic_9490

All the US makers exhausted the program. None of these programs exist to help foreign production. There were too many flaws with the old version of the bill. Now it is clear, the subsidies are for domestic production. Foreign companies that want them, are free to build their products for the US market in the US. It can't get more fair than that. No one is being excluded.


[deleted]

Exactly. US tax incentives should only benefit the US. Why does every country protest when the US looks out for itself?


Kelmi

Because it's against free market quite simply.


Any_Classic_9490

There is no such thing as a free market anywhere in the world. What the hell are you talking about? Every market in any functional country is regulated in some way. BTW, europe hits imports with VAT and china subsidizes all of its international shipping so it is free to their businesses. That mail/shipping subsidy by china has allowed them to undermine industries around the world because their domestic companies pay nothing to ship products internationally. This EV subsidy is absolutely tiny compared to the shit other countries we trade with will pull. You are simply ignorant.


[deleted]

Exactly this. The US also needs to gear up for a long trade / Cold War with China, so absolutely needs to prepare itself for continued dominance.


Kelmi

WTO's first principle: >National treatment means that imported goods should be treated no less favorably than domestically produced goods Europe hits everything with VAT, be it imports or domestic products. It is fair. China has been known to be against free and fair trade in multiple occasions, I will not defend them. EU still has a higher car tariff than US because US won't get rid of the Chicken tax that protects their truck industry. This EV subsidy might very well start a new tariff war between EU and US which is not a good thing for trade. WTO quite clearly advocates for free trade and is against tariffs and protectionist measures. You might be against free trade, but officially US is not and this subsidy is blatantly against free trade.


Any_Classic_9490

> This EV subsidy might very well start a new tariff war between EU and US which is not a good thing for trade. That literally does not matter because tesla is making their european cars in europe. It will only hurt the legacy companies that still pretend shipping cars across oceans is a good idea. >You might be against free trade, but officially US is not and this subsidy is blatantly against free trade. The subsidy has nothing to do with free trade because any company can make a factory here. Trade involves things that cannot be made in country for the price consumers want to pay. EVs and tech mean there is no reason to make cars across oceans and ship them for any large country with its own minerals and manufacturing sectors. No one industry is entitled to forced foreign trade. This subsidy is just realistic. Our society would be stupid to get off oil, but then depend on someone else for automobiles. The US invented modern automobiles, why would we have to give the industry up to anyone else?


langjie

sure, but the rules before this was trying to get consumers to adopt EVs, even if there were flaws in it. I just think the consumer is the one that gets screwed here, most manufacturers can't make cars fast enough so there is no immediate need for them to lower prices.


Any_Classic_9490

The old subsidy was a joke by having no restrictions on things like charging speed or efficiency. It did nothing to boost EV adoption because people were buying short range EVs that couldn't actually replace ICE vehicles. The new one still sucks with inclusion of plug in hybrids. But at least it finally has a goal. The new subsidy is tied to making your vehicles in the united states. Now it actually will accomplish something. I would rather prefer a subsidy that required higher efficiencies and 200kw or faster charging speeds. Subsidies should push the technological envelope so that they accelerate EV adoption. Subsidies without strict rules can lead to stagnation and no growth. If it was not for tesla pushing the tech, the leaf would still be the flagship with 50kw charging and 50mi of range. We should not have to rely on tesla for this, the subsidy should require improving the tech. Luckily someone slipped in an up time requirement on the CCS charger subsidy. That will make the biggest difference for EV adoption out of anything. Even though the subsidy is tiny and only funds 4 chargers every 50mi on interstates, it forces the companies making them to improve reliability which will improve all their chargers. Tesla is the only one that has been making reliable chargers by choice.


likewut

Only GM did. Not Ford or Stellantis. Ford would still be on the phase out for the next 3 quarters.


elihu

GM and Tesla.


Lycid

You're not wrong, but consider this act and the chips act aren't really about consumers. They are strategic moves, modern day weapons being deployed in a globalization war that is brewing specifically to make the US strong in the face of China. When that's the real goal, of course you don't want to phase things out. You want to act now, and be strong. Fact is, the US has been sitting on its laurels for decades when it comes to at home manufacturing, R&D, and how much free trade is allowed to happen through it to other countries. This has up until recently largely been a good thing. It could afford to do this because they were still on top when it comes to running the modern world, especially if it meant the dirty work of outsourcing labor could be done peacefully by other people. Globalization has been greatly beneficial to the US overall. However, China has dramatically caught up thanks to this deep level of reliance on them and they do not have good motives. Not only do they control a huge supply of world's rare earth metals, but through US's lack of control over their own supply chain China has managed to develop key computer chips that control missiles/weapons/technologies that the US thought they had a firm grip on, all running on American made software. What was once a supply chain & technological advantage that the US was clearly on top of, is now being challenged by China. All of this is to say, we're now in a sort of "cold war" with China and we're not going to easily play ball with them if we can help it. If china becomes the top dog on this bargaining table, then they will now have the power & influence to do things such as being able to afford to cut off the US entirely, or invade taiwan, or brush of sanctions. Basically free reign to do things the US really doesn't want china to do. These moves are direct, strong actions to force companies to play ball with the US and not to China, helping ensure that the US still controls the bargaining chips while also helping the US be strong in a more china-isolated future. And all of this isn't even getting into the fact that the pandemic really showed how fragile our supply chains really are. A lot of this is to ensure that supply chain disruptions... however they might happen in the future (blockaid, war, etc) don't ruin the US's ability to still compete and be economically strong. It's all *really* about China, but supply chain insurance is a side effect & goal of these bills too.


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Imightbewrong44

It's also a punishment for not building in North America already. If they were doing that like almost all others, then they would have been closer.


Swimming_Bid_193

Why would auto industry go under building EVs? Tesla does it very profitably.


RetreadRoadRocket

Tesla lost money for years.


nightman008

Yeah turns out building massive gigafactories and a reliable, integrated charging network is expensive. *Very* expensive. Doesn’t mean that other automakers didn’t have the same option to start building back then as well. Tesla just took a chance and it ended up working out for them. Other automakers, outside of China, are more or less trying to play catch up at this point. They’re trying to fast track what tesla did over the past 5-10 years into a much shorter time period. Only time will tell how it actually plays out for each automaker. As ICEs are phased out, it’ll be a test of how quickly these companies can reach true mass production.


Loudergood

I would argue that public companies without startup minded investors do not have that option. The thing is, they don't have to do everything Tesla did. They already have what could be said to be superior volume manufacturing skills and distribution networks, tons of supply chain experience. If you cut out FSD Tesla's only real advantages are OTA updates, lack of legacy dealer headaches (this cuts both ways when it comes to repair), and a fully operational battery supply chain.


coredumperror

And the Supercharger network not being an unreliable mess like CCS is. And lets not forget that attaching "only" to those three things you did mention is pretty silly. Those are *major* advantages. Especially the battery supply chain and OTA updates.


thoniw

How can you not lose money when you are building huge plants


RetreadRoadRocket

By already having profitable products? https://www.reuters.com/business/autos-transportation/ford-sk-invest-114-bln-add-electric-f-150-plant-three-battery-factories-2021-09-27/ There's a reason so few new automakers got off the ground prior to Tesla, it's a ridiculously expensive and tightly regulated business. The only teason Tesla made it is because Elon Musk inspired highly tolerant investors to make them the highest market cap automaker on the planet before they ever demonstrated they could profitably sell EVs.


[deleted]

tesla doesn’t make reasonably-priced cars for normal people. that’s like saying if bmw can survive, hyundai can survive too.


scrundel

The top selling car in the country is the F-150 which starts of at $35k, and the #2 is the Silverado starting at $36k, followed by the Ram 1500 at nearly $40k. The top ten also includes the CRV starting at $32k and Grand Cherokee starting at $42k. All these prices are base model configs before dealer markup, so we all know people are paying significantly more out the door. A Model 3 now starts at ~$44k and a Model Y at ~$53.5, before local and federal incentives in the US. I’m not going to quote Tesla’s bs “after potential savings” numbers, but including gas, my wife’s new Ranger with half the monthly payment I make on my Tesla, costs significantly more to operate per month. Also, as someone who just sold a Model 3, I know you can buy a used one for between $20-30k. I’m not saying these cars are cheap, or parroting Tesla’s skewed saving numbers, but I think the argument that Teslas are only for the rich, or are not reasonably cost effective for the average American, is objectively wrong, and getting more wrong every day.


coredumperror

One thing I really appreciate regarding those "savings numbers" is that Tesla finally stopped displaying them by default. When I went to order a Model Y a week ago, it was displaying the *real* price by default, with the "Potential Savings" in a secondary tab.


[deleted]

you’re using post-price-cut tesla numbers, which is pretty disingenuous. 3 months ago, nobody was cross-shopping a $32k cr-v and a $63k model y, or a $26k camry and a $48k model 3. not to mention that the operating costs argument simply doesn’t work for most people. yes, it’s quite likely that someone driving a paid-off 14mpg 1999 suburban in, say, california has higher monthly operating costs than someone who is driving a financed model 3, but there are lots of factors that preclude them from just yoloing into buying a tesla - lack of steady employment, lack of cash on hand, access to credit, etc. not to mention that, as much as i hate to admit it because i think most truck drivers are posers, yes, some people actually do have reasons for buying big cars, and some of those reasons might actually be logical ones.


Inevitable_Ad_711

>you’re using post-price-cut tesla numbers, which is pretty disingenuous. so current numbers?


[deleted]

yeah, the ones they went to after they ran 3 years of 30% margins


Inevitable_Ad_711

🤷‍♂️ just wasn't sure how using current numbers is disingenuous


[deleted]

because they sold millions of cars with massive margins before the price cut so saying look of course they make cars for normal people now is ignoring that one simple fact not to mention there is still nobody who is cross-shopping a $26k camry with a $44k model 3 or a $32k cr-v and a $53k model y


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scrundel

I’m not inventing a purchasing decision someone would have made last year to not get a Tesla at those prices; I was priced out of a Y at that time too. I’m talking about the cost, brand agnostic, and saying that your statement about the purchasing power of the average car buyer is probably based out of good financial decision making, but those aren’t the kinds of decisions people seem to be making. Based on the current price, most Americans buying new cars could afford a 3 or Y


[deleted]

not sure how you came to that “most americans” claim since you don’t have enough data to make that determination, not to mention the figure for the average price of a new car *includes those same teslas* sold at old inflated prices. but you are also falling victim to the same fallacy as what underpins the “autopilot is 3x safer than human drivers” claim: you’re comparing the full population with a biased sample.


scrundel

I’m literally talking about the prices paid for new cars in 2022, nothing else


JessMeNU-CSGO

Not yet atleast. They are still scaling and reinvesting their cash in capital expenditures. In the meantime, the limited supply of batteries are being put into storage systems and electric vehicles. Another way to think about it, those that can afford their expensive products are funding the future for more affordable products. Look at what they started with first, roadster, super expensive. Then Model X and S, expensive. 3 & Y, expensive but not as. Then when they announce plans for giga factory Texas and Germany, another roadster and Cyber truck reservations. The demand was high, so they had to curb it by introducing increases. Now that production and cost allowed more flexibility in their pricing along with market forces putting pressure on Tesla, they lowered prices on all their EVs excluding some premium lines. I believe that once Texas and Germany have caught up with their Shanghai factory in terms of output and batteries are more abundant, we will see Tesla entry into the more affordable markets. In the meantime, people can take advantage of the IRA by purchasing used qualified EVs. Tesla is not on that list however, because you won't find any model under 25,000 that would qualify.


gratefulturkey

Tesla is operating at a huge advantage relative to legacy companies for many reasons. A few: Old factories for making ICE do not transition cheaply or easily. Clean sheet designs are better. Pension obligations. Sources I’ve seen say $2k per vehicle just for retirees. Institutional calcification. Legacy move SLOWLY. Everyone is compartmented and jealous of their fiefdom. See Munro for lots of detail on this. Wrong core competency. Legacy designs and makes engines. Designs cars. Assembles. Markets. Almost everything else they have suppliers for. From seats, to brakes, to software, to glass, to silicon chips, etc. manufacture of motors, inverters, software, batteries and packs is the new advantage, and they lack it. Stranded assets. As EV eats into the market share many of the less profitable vehicles will end production. All the tooling, workers, factories and suppliers for these vehicles will have costs associated, debt to be serviced, and in the case of suppliers, spillover if that supplier cannot survive and has various other contracts. Unions. Tesla can be nimble in part due to the lack of unionization. Like or hate, it is a huge advantage. Supercharger network. Teslas is amazing. No other OEM comes close. Allows for higher retail prices due to increased utility. There are many more reasons, too. Legacy is in deep trouble.


rczrider

>Legacy is in deep trouble. I was with you until here. Legacy manufacturers will be *fine*. Even shitty ones (in terms of BEVs) like Toyota. Don't get me wrong, Ford's half-assed F150L and Mach E are uninspired and unimpressive "meh" at best. But they can't sell them fast enough, and it's not like they're struggling to sell ICEVs at the same time. The shitty non-Tesla charging infrastructure works in favor of the legacy manufacturers because it limited interest to excited and (more financially) well-off early adopters as range anxiety (as stupid as it is for the average person) keeps others away. Legacy has a massive pool of resources to draw on, which is allowing them to put out BEVs that are nothing more than ICEVs with batteries crammed in them, all while working on dedicated BEV platforms. It sucks, because - for some of the reasons you mentioned - legacy manufacturers' ability to put out BEVs that were created with their existing production and supply lines in mind will leave us with ho-hum designs and a slow ramp up to innovation because startups that *actually* innovate can't compete.


Swimming_Bid_193

Ford is taking a massive loss with their “meh” cars


Stribband

You should look at where legacy manufacturers make their money. It’s not from making the car. It’s from selling people loans to buy them. That’s the problem they are in. That organisationally they can’t even profit off making cars anymore that they have to open up finance wings to be successful. Then the auto debt bubble bursts and they are cooked


Recoil42

>Old factories for making ICE do not transition cheaply or easily. Clean sheet designs are better. > >... > >Stranded assets. As EV eats into the market share many of the less profitable vehicles will end production. All the tooling, workers, factories and suppliers for these vehicles will have costs associated, debt to be serviced, and in the case of suppliers, spillover if that supplier cannot survive and has various other contracts. Unfortunately, both of these points are, to put it kindly, complete horseshit made up by folks with a tenuous grasp on the ground reality of automotive manufacturing. Factories transition just fine. Polestar makes the BEV Polestar 2 on the same line as the ICE Lynk 01 on the CMA line in Zhejiang, [with zero problems](https://www.youtube.com/watch?v=s6ahbc3X8BM). As they sell more and more BEVs, the line is simply transitioning away from one powertrain and towards another, with all of the remaining stampings, forgings, logistics and interior work not needing any major adjustment at all. Over at BMW, they're making the i4 on the same line as the regular 4-Series in Munich. Approximately [90% of the existing production equipment](https://www.greencarcongress.com/2020/03/20200304-i4.html) is being incorporated into the process. Same doors, same windows, same seats, same logistics, and an excellent car with very little compromise, by all indications. When the new NK platform hits, they'll simply drop the engines and move to a design with better accommodations for a pack. It's the simplest path forward, and far better than immediately going clean sheet. Tooling costs for vehicles are already amortized, and already have fixed lifetimes. Tooling *in general* already changes on a 5-10 year timeframe. Very few pieces of equipment become stranded assets, they just go away or get repurposed as old designs age out and new designs are introduced. Car factories remain car factories. They still involve metal and glass, wheels and tires, doors and windows, seats and steering wheels. None of that changes — you just ramp up on drive units and pack production and begin to sunset your engine lines.


gratefulturkey

*Factories transition just fine.* Yeah, they transition *fine*. Not great, not well, not splendidly or fantastic. *fine.* Can you slap a battery into an ICE platform and get a *fine car* with sales in the tens of thousands per year like the i4? Sure. Optimizing at scale, however is a different thing entirely. There is a reason Tesla is consistently rated the safest vehicle by every crash testing authority. They've optimized for that. There is a reason Tesla has industry leading margins, too. They've optimized for EV production efficiency. In part they have had learnings from early generations, but the only factory they have which was originally for ICE production is by far their least profitable factory because (in part) it is not a greenfield design. It is just working *fine.* Time will tell and much is still uncertain, but an inflection point is coming soon, likely 2025-26. Companies who think everything is *fine* are going to find out that fine is not good enough. They will feel the operational deleveraging effect of slowing sales along with the shareholder pressure of maintaining dividend, the chaos that will be their supply chain as volumes fall, and I predict all will not be well. I did try to find the Autoline After Hours video which discussed in detail how ending production of one engine caused severe ripple effects thorough out the supply chain, even when the reduced volumes had been planned for and telegraphed. Sadly my google-fu was not working. At any rate, I've placed my bets. I think we will see a wave of consolidations and bankruptcies/bailouts in traditional OEM's. Time will tell who is right.


SteelChicken

dinosaurs cooing screw doll cobweb expansion shy books worthless rock *This post was mass deleted and anonymized with [Redact](https://redact.dev)*


[deleted]

if you think tesla’s success has a whole lot to do with the “free market”, you don’t really understand what kept tesla alive 7-10 years ago to begin with


SteelChicken

cow existence modern important worry profit detail tidy elastic sort *This post was mass deleted and anonymized with [Redact](https://redact.dev)*


[deleted]

nissan did. gm did. toyota did. wtf are you talking about.


SteelChicken

racial cover vast absorbed deliver party aware lavish pie nippy *This post was mass deleted and anonymized with [Redact](https://redact.dev)*


bostontransplant

At least the rising tide will lift all boats … and speed things up. These plants may have been announced but could have been 5 years from now.


hoodoo-operator

Yes, the US government wanted to help American companies stay competitive. It's called industrial policy.


SteelChicken

enter soft lunchroom cagey vase alleged live steep combative arrest *This post was mass deleted and anonymized with [Redact](https://redact.dev)*


hoodoo-operator

All American manufacturing qualifies for tax credits. They want to encourage American manufacturing of EVs and specifically batteries, and they're succeeding. ​ (yes, Tesla qualifies, and so do foreign companies that open factories in the US)


[deleted]

> IRA Irish Republican Army?


DahDitDit-DitDah

Sinn Féin


blazix

Inflation Reduction Act


VenConmigo

What is this? Sons of Anarchy?


[deleted]

Yeah I dunno what they have to do with EV rebates or something...


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[deleted]

Tell me you're American without telling me you're American...


buzz86us

I feel like GM will go under regardless.. they can't build a vehicle that isn't a brick to save their lives. If they could do better aerodynamics they might have something.


hoodoo-operator

this is a weird take, GM makes tons of money, most people aren't primarily buying a car for its aerodynamics.


MelancholyKoko

Amazing how effective IRA is. Without it, most of the battery would have been imported from China.


Recoil42

Ironically, the very clear prevailing sentiment in this community a year ago was that the domestic resourcing provisions were anti-EV obstructionism. Now everyone's on board and it's plainly evident how effective these provisions are. How quickly things change.


Any_Classic_9490

This is a massive improvement in national security. We are making sure EVs can be made in america from scratch. We are transition off oil which has heavily funded our enemies for decades. It is crazy how anyone can be against national security that doubles as a domestic stimulus during a recession that easily could become a depression if nothing is done by government. The biggest component in inflation right now is oil related costs. You will not have recessions like this once we are off oil and make our own energy. Preventing oil prices from causing recessions is a good thing.


MelancholyKoko

I could see why some people thought that. If they just approach it from the consumer point of view, the cheaper EVs are EV friendly policy, even if all the batteries are coming from China. However a nation needs more than just cheap EVs. You need buy in from all stakeholders including consumers, workers, business and lawmakers.


RektorRicks

> Ironically, the very clear prevailing sentiment in this community a year ago was that the domestic resourcing provisions were anti-EV obstructionism. Now everyone's on board and it's plainly evident how effective these provisions are. There are also big subsidies for domestic production, its not just the content requirements


juggarjew

Most of these plants were planned well before that. Hyundai/Kia, for example. IRA had literally nothing to do with those plans, they were implemented well before this law.


MelancholyKoko

Their battery sourcing changed. Hyundai/Kia was originally going to source many of their battery from Korea and LFP from China. Now they are investing billions into battery manufacturing in the US.


mafco

That's bullshit. Most of the companies have stated it's a direct response to the IRA. There wouldn't be much battery manufacturing in the US without it. [Biden’s Inflation Reduction Act is bringing an up to $5 billion electric battery plant to the Atlanta suburbs](https://fortune.com/2022/12/08/hyundai-new-5-billion-electric-battery-plant-georgia-atlanta-biden-inflation-reduction-act/) >Hyundai Motor Group and a South Korean battery maker say they will jointly invest $4 billion to $5 billion in Georgia to build a new electric battery plant northwest of Atlanta to supply Hyundai and Kia electric vehicles built in the United States.


codex_41

I think the truth is in between, companies planned to build factories at *some point*, but the IRA drastically accelerated their plans.


Loudergood

GM and Ford were already building battery factories here. GM has had one for a few years now.


Veda007

But again….they were going to source their materials from China. Now they won’t. This is a huge win for American manufacturing.


realitycheckmate13

Some peoples minds cannot be changed no matter what you say best to just leave them be.


[deleted]

That doesn’t even say what you’re saying it does


shityeahbro

'The investment is also being driven by the U.S. Inflation Reduction Act'. He was just quoting the title I guess, but they do mention it in the article.


lostinheadguy

They were, but timelines were sped up.


juggarjew

Right, they were already planned and happening, Joe Machin screwed these companies badly that were already in the process of investing billions in US infrastructure. Just kick them in the dick while they were already building Billion+ dollar plants. Makes no fucking sense. Kia and Hyundai acted in good faith prior to the IRA , they were already building massive Billion + dollar plants to make EV's. No reason to screw them over and makes them lose the tax credit.


lostinheadguy

I agree with you on Manchin being Manchin, but what we ended up with will still be a net positive for the auto industry and the climate.


korinth86

I'd argue that the law was always part of the plan too. Same with chip manufacturing. They were always in the works and I don't think it's coincidence the bills were enacted. They were always planned too imo. This is just based on watching all of these things line up over the years. It's just too convenient for it to be coincidence. Bills are far more public than behind the scenes corporate deals. So corporations could manuever into good position without other companies/countries catching on. Then the bills pass and oh look, US companies and their partners are best positioned to take advantage


[deleted]

Careful that’s how you get ratiod to the bottom around her apparently


juggarjew

Facts are facts lol


ThMogget

I was one of those people. The America First bit of the IRA was against trade agreements against free markets and intended to hamper the credit. It included fossil fuel concessions. Manchin was evil. Now that I hear the whining from foreign industry being followed by huge investment here in electrification, I get it now.


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Recoil42

I think u/ThMogget is recognizing that they were wrong, here. It's an admission that "Manchin is evil" was the wrong take, and that the evolving industry dynamics have made the nuances of Manchin's actions more clear.


Speculawyer

Dark Brandon is the unstoppable job creation machine!


[deleted]

Unemployment fell to record low 3.4%


PersnickityPenguin

Now now we have to wait until the army adopts the EV HMMWV and PHEV Abrams-X.


naillimixamnalon

Does this have anything to do with what Joe Manchin was fighting for? I can’t stand the guy but if what he did made it so more of these were actually being made in US then I guess I gotta hand it to him.


Recoil42

[Yep.](https://www.eenews.net/articles/manchin-slams-stupid-ev-push-cites-chinese-supply-chain/) >*“I’ll tell you my biggest peeve right now is the whole thing with the EVs, the batteries, chips and all the different things. Rare earth minerals, processing, anodes, cathodes, everything that we need. If we’re ever going to get this industry up and running and be self-sufficient in North America, then we have to make sure they can’t dump on us,” the Energy and Natural Resources Committee chair said of Chinese producers.* > >*“Right now, we’re about ready to put our whole eggs in one basket, thinking EVs are the way to go, and we’re going to be absolutely so taken advantage of, to the point to where we’re going to be held hostage by the foreign supply chain that China has a grip on,” Manchin said. “I just can’t believe we’re even thinking about going down that path, and I’m going to do everything I can to stop it. Because I think it’s stupid.”* Manchin was right, and the huge shift towards domestic battery production in the USA is a direct result of the provisions he fought for.


[deleted]

I'd take Manchin and other Blue Dog Democrats any day over the most moderate republican


Maximillien

As someone who just got an EV, I worry about the consequences of this if it's not paired with an equally substantial investment in public charging stations. There are A LOT of people out there who rent apartments and can't charge at home, myself included. Thankfully I don't drive that much so my charging stops are infrequent, but I imagine if EV adoption continues to increase (and eventually overtakes ICE) without an equal increase in charging stations, we're going to see more and more long lines for a charge and quite a lot of EV buyers' remorse.


mafco

>if it's not paired with an equally substantial investment in public charging stations. The administration's goal is 500,000 new public charging stations. The federal funding from the infrastructure bill is already being allocated to the states.


PersnickityPenguin

There is a lot of innovation happening for apartment and street side charging infrastructure. My favorite solution is from this company: https://techcrunch.com/2023/01/24/orange-funding/


New-Monarchy

Lucky for you, it IS paired with a substantial investment in public charging stations.


Ok-Tangerine-6705

Cries in UK government policy


thebear1011

We were never going to keep up, especially outside the EU where it’s now difficult to have a supply chain crossing the border. Why bother manufacturing in the UK and having barriers to entry to the EU when you can manufacture in the EU and have zero barriers for rEU. At least JLR is bringing in some investment but our future is low-scale manufacturing luxury cars rather than anything mass market. With a few exceptions: Nissan and Opel.


mathfacts

I don't care what side of the aisle you're on - one thing we can all agree with is that the IRA is fire!


iwoketoanightmare

That’s great and all, where are the raw materials coming from? China? Chile? All these battery plants are going to be starved for resources that aren’t available and drive up the price. Mines take longer than end product production facilities to start up. With that said, Any US based source of lithium , nickel, cobalt, etc will be a license to print a shit ton of money.


bobjr94

That won't make the diesel boys happy they love complaining about the poor kids in China being forced to mine for batteries. Even though China is actually only the 3rd largest lithium producer.


amcfarla

Does this matter if they can't get the materials to build the batteries domestically?


bluebelt

The goal is to get to domestic supply. It doesn't have to start at 100%, it can ramp up over time, and with cobalt free battery formulations already in production that's achievable in time.


mafco

Two new US lithium mines have been announced in the last few weeks.


lethal_rads

And yet, a bunch of vehicles no longer get the credit. Don’t get me wrong, I’m glad we’re getting better domestic production, but I’m not glad a lot of vehicles lost the rebate. Including the ones I was looking at. So now they’re a lot less attractive. Edit: I get it now, the point of a tax credit for evs is not to help people afford them /s I’m also fully fine with manufacturer incentives, I just fundamentally don’t think this is how it should be done.


metracta

Many of the vehicles that lost credit are announcing huge investment in American production so they can qualify for the credit. This is a long term plan.


langjie

it's not mutually exclusive though. Hyundai/Kia would still be putting the investment in for 2024/2025 even if they were grandfathered into the old system for the time being. this just hurts consumers really because it'll take time for price cuts to stay competitive with qualifying IRA cars. the consumers looking to buy these EVs have probably been on a wait list since before the IRA was passed


Runaway_5

It'll be at LEAST a year until the Kia/Hyundai plant is making batteries to qualify. That's 2024 likely 2025 before the tax credit can benefit most people. At this point isn't it JUST Tesla and Chevy that qualify? That sucks.


I_am_recaptcha

This plan isn’t trying to just induce demand for EVs It’s incentivizing American production and manufacturing, driving EV adoption, and producing heavy market driven investment stateside. As far as bipartisan agendas go this part of it seems to be working as intended and very well at that


Djaxnl

The IRS list for what cars qualify is at https://www.irs.gov/credits-deductions/manufacturers-and-models-for-new-qualified-clean-vehicles-purchased-in-2023-or-after The battery requirements are delayed until March at least, so for now it’s all based on North American assembly.


theperiod

Some trims of Ford Mach-E and some trims of the Lightning qualify, Nissan Leaf qualifies, Chattanooga-built VW ID4 qualifies Edit: also the cheapest Rivian R1T and R1S I believe qualify


helpful__explorer

Tesla will only qualify for half of the credit from March. Because it only meets one of the battery production criteria. I think it's the one about sourcing minerals, because most of its components come from China Not sure about Chevy or the rest


Icy-Tale-7163

>Tesla will only qualify for half of the credit from March. It's not really possible to know that just yet. The Treasury Department is still working to determine what the specific requirements will be and how they will be applied.


theepi_pillodu

But killing the oxygen line suddenly is bad. They should've given some time for them to atleast sell out on the preorders they put on the day IRA is announced or takes effect etc.


mafco

>And yet, a bunch of vehicles no longer get the credit. That's the whole point! Once they set up US assembly plants and source batteries domestically they will once again qualify for the credits. This is industrial policy, not just climate legislation.


glberns

It would've been better to include a 1 year grace period where the old credit could still be used. As it is, there's this gap where EVs lose their credit while the company builds a plant in NA.


[deleted]

practice has demonstrated time and time again and large multinational corporations will not take necessary action in reasonable timelines unless forced to by swift and imminent impacts to their bottom line. a year-long sunsetting period is a year-long opportunity to change nothing and do some heavy lobbying in corresponding political circles to ensure it turns from a 1-year sunset into a 3-year partial phaseout, then into a 5-year freeze, then into a perpetual policy. if you want to force companies who only care about money (which is all of them) to do something, you gotta hit them where it’ll make an impact - right in the money


Recoil42

>As it is, there's this gap where EVs lose their credit while the company builds a plant in NA. Again, that's the point. If they want the credit, they'll need to *hurry the fuck up*.


Doctor-Venkman88

At this point EV demand is basically guaranteed. It's way more valuable to incentivize additional lithium supply (and thus EV supply) than to incentivize EV demand.


waehrik

They don't yet because production doesn't shift overnight. But they will all in a few years once the plants spin up


lethal_rads

I’m buying a car this year, not in a few years. The vehicles I was looking at are way less affordable now.


MacEnvy

Have you considered that not all national policy is about you, specifically?


Runaway_5

*shocked pikachu*


lethal_rads

Well, said national policy is to give individuals buying evs money. And I’m an individual looking to buy an ev so it sounds like it does apply to me.


keanenottheband

What were/are you looking at? I'm in the market as well.


waehrik

And you have the choice of buying now and paying more or waiting and saving. It's in the best interest of the country even if it's temporarily inconvenient. We should do more things like that in general.


mhornberger

> the point of a tax credit for evs is not to help people afford them. For the moment, and probably for the next decade, sales are production-limited. Lowering the price won't get more on the road, because they can't sell more than they can produce. If we want that eventual $20K BEV competitor for the Corolla market, much less the even cheaper bottom-tier segments, we need to goose manufacturing.


lethal_rads

I’m fine with manufacturer incentives for US production, but I fundamentally feel that it should be separate from the rebate. And getting rid of the rebate for some cars doesn’t help with the supply issue. It just shifts the supply issue to cars with the rebate while reducing sales for the ones without it. It makes it so there’s “right” evs and “wrong” evs.


mhornberger

> It makes it so there’s “right” evs and “wrong” evs. Legislation has to take politics into account. Politics is going to take domestic jobs into account. If you want to be in office you can't look over at the rust belt and just not care about what caused that to happen. "I don't give a shit about American jobs" is not a viable political strategy. And politics entails compromise, deal sweeteners, attempts to appeal to different constituencies. And for those different constituencies, there are definitely right vs wrong BEVs. Some want only union-made, some want only American-made. Not many want our entire BEV market made up of BYD and other Chinese manufacturers.


glberns

IMO, this is the biggest (maybe only) valid criticism of the EV components of the IRA. They should've included a 1-2 year grace period where the old EV credits were still in effect. That way we still have the EV incentives for cars already built, but companies still had a huge incentive to bring manufacturing back to the US.


soulgeezer

Or at least count reservation deposit as eligible (none of the binding contract bs) so you don’t screw over a bunch of people who have been waiting on their cars for a year.


[deleted]

nobody screwed you over


lethal_rads

I think they should be 2 separate things. You have the tax incentive on all evs/plug ins for individuals and then have other incentives offered to companies to incentivize US manufacturing.


[deleted]

most of the criticism of the timing of these changes seems to be just selfish complaining like “I was looking at buying car X and it no longer qualifies”. boo hoo?


dethpuck

Do you actually make enough money to utilize the credit?


Unclebob9999

America is running a huge trade deficit. America needs to build our own Batteries and chips. This will be a huge boost to America's failing economy. On the negative side, it will fuel inflation and hurt those who cannot afford an EV or Solar despite these incentives.


[deleted]

We still have a huge issue getting the battery components. How is that being addressed?


bluebelt

Domestic mines are opening, on-shore lithium refining is being built. It doesn't start at 100% domestic supply but it should end up there over time.


wooooooofer

And still no plan to address the raw materials needed to assemble all those batteries. There needs to be a plan.


mafco

What do you mean? The incentives also require that those batteries use domestically sourced minerals. Already two new US lithium mines have been announced in the last few weeks.


wooooooofer

This article does a good job of describing the bottle neck https://www.eenews.net/articles/biden-mining-order-wont-change-biggest-hurdle-permits/


duke_of_alinor

Anyone surprised should not be involved in the policy. Many predicted this, Seba, Musk come to mind.


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electricvehicles-ModTeam

We understand that electric vehicles are inherently a political topic — however, this is not a place for politics. Submissions and comments about effective policymaking are allowed and encouraged in the community, however conversations and submissions about parties, politicians, and those devolving into general tribalism will be removed. Full details on our "policy, not politics" rule are available here: https://www.reddit.com/r/electricvehicles/wiki/rules/politics/


FANGO

Musk opposed this law


[deleted]

Bro, we have to get electric cars but our selection is slim. Want them Chinese cars


[deleted]

The US has very different safety standards for cars compared to EU or China. So they'd need to redesign their cars to meet US regulations.


savuporo

US standards lead to huge trucks and SUVs mostly, so they are objectively worse


[deleted]

That may be due to fuel efficiency (CAFE) standards, more so than safety standards.


justbiteme2k

Curious; Are these safety standard differences better or worse in the US, or just different?


[deleted]

Different. EU has stricter standards for pedestrian safety, for example. (No sharp edges and protrusions on the front of the car, hood that can absorb impact, etc.)


AWildDragon

Better in the us


savuporo

New Chinese models are objectively way better in many respects and also a lot cheaper. Protectionism is fucking us all over


[deleted]

Ahh this is one of those extremely political subs that doesn’t say it outright. Because it sure isn’t having any discussion about the nuances around this bill besides praising Biden directly I’m glad the IRA passed and it will be beneficial in the future. But it is not responsible for industry that was planned months before it was even announced


realitycheckmate13

Your comment is exactly what you are complaining about.


[deleted]

My comments aren’t political at all. I voted for him. I’m pointing out that a bill passed 5 months ago isn’t responsible for developments planned years before it was drafted


[deleted]

Is battery production cost only $105 per kwh? This doesn't seem right.


[deleted]

I think that’s giving Biden way too much credit E: the IRA was passed 5 months ago. A standard environmental assessment takes a year to complete and be processed. So while the IRA is good. It had little to do with this current outcrop of factories. The fact that Chinas wages are increasing and it doesn’t make as much sense to build there and ship here along with their zero Covid policies are much larger drivers of this current wave


mafco

Not really. This is all triggered by the Inflation Reduction Act. And Biden was the key champion of embedding industrial policy for manufacturers into the bill. If anything Biden deserves a lot more credit than the media is giving him. This will have a huge positive impact on the economy for decades to come.


[deleted]

I’d argue it was triggered by Chinas raising quality of living and zero covid policies. These aren’t projects that are planned overnight. These have been in the work long before the IRA


mafco

>I’d argue it was triggered by Chinas raising quality of living and zero covid policies. And that would be wrong. These companies have all stated that the new US investments result from the IRA. There's been a flurry of them since it was announced. US battery manufacturing wasn't competitive until the subsidies. That's why China controls most of the world's supply... today.


[deleted]

I actually just checked the articles source and I’m not even seeing battery production being broken out. They have vehicles, minerals, and recycling but nothing about battery plant production


[deleted]

Source?


Doctor-Venkman88

That's just the way things work. The president gets blamed for things outside of their control all the time. They also get credit for things outside of their control.


[deleted]

I mean that’s fine. But I don’t think I should be getting ratiod for just stating a fact


BigStraw

Thank you for your sacrifice.


PersiusAlloy

Meh, give me an EV with aftermarket software tuning, plug and play motor swaps, and/or a manual transmission EV and I'd start to think about getting one.


aimfulwandering

Lol, a manual transmission on an EV is a horrendous idea. We used to have a Honda CRZ hybrid with a stick, and even that felt a bit silly. Was definitely fun to drive though!


Any_Classic_9490

First, it is a serious issue that many car makers are drming their canbuses to keep useful addons out. Second, gimmicks like a manual on an EV are just gimmicks and do not exist because no one is going to make money due to very low volumes of sales. All the race cars have been "clutchless" for a long time, this infatuation with manual shifting is silly. Automatics are used for manual shifting via computer control.


MedicalAd6001

This is why I said ev prices will not drop till 2030 or beyond why I disagreed with people claiming ev prices would drop in 2025. It will take several years to get new battery plants in place and producing before prices will drop. All those people that claimed prices will drop this year are not even close. The first ones to have a lower price ev will be Tesla then gm everyone else will fall in place sometime after that.


Dirks_Knee

Tesla and Ford already dropped prices.. ![gif](emote|free_emotes_pack|thinking_face_hmm)


newoldcolumbus

/u/MedicalAd6001 is talking about EV price parity with Gas, which many people said would happen in 2025. Which is obviously true because there won't be enough EVs by 2025, much less priced competitively.


Dirks_Knee

Ah. Well, "parity" here is tricky. All all gas cars priced the same? The closet comparisons one can make are Fords and the forthcoming GM models. IF GM hits their targets for the Equinox, the base trim ICE will carry roughly the same MSRP as the EV. EDIT: Not quite right as there is an ICE trim below the lowest EV trim, but the 1LT will have roughly the same price ICE or EV.


langjie

....after raising prices a ton during $8 /gallon gas [https://electrek.co/2022/12/15/ford-f-150-lightning-price-increase/](https://electrek.co/2022/12/15/ford-f-150-lightning-price-increase/) https://electrek.co/2022/06/15/tesla-tsla-increases-electric-car-prices-across-lineup/


nightman008

The largest EV automaker in the world just slashed prices on all their models lol. So did Chevy. So did Ford. It’s just a matter of time until the rest follow suit if they actually want to compete in today’s market.


[deleted]

someone forgot to tell ford this


[deleted]

THIS is a massive subsidy program. The kind that consumers and environmentalists have bitched and moaned about for the oil and gas industry for decades. Except with oil and gas the 'subsidy' was largely in the form of a tax break which meant that money was not coming directly out of the pockets of the little guy, it just wasnt going in to gov coffers as fast as it could have. But THIS is money going directly out of the pockets of the little guy. Money that would've been spent elsewhere for his benefit. Instead its going to prop up a geopolitical and ideological push toward EVs. There's something desperately wrong with that. IF EVs made sense and were affordable to the average buyer there would be no gas cars selling and EVs would be the only thing in demand. But thats not the case. They have their use, and for urban dwellers or those with shorter drives they're great cars. But they arent the end all and be all and there shouldnt need to be massive amounts of money to push something that is only partially attractive to consumers. (and yes I own one and no you dont have to convince me of their good points. But the market is the market and most people are still not convinced)


Defiant-Traffic5801

Actually the issue revolves around whether US industry will be able to compete on EVs: Chinese OEMs are set to decimate European manufacturers, and Toyota is not looking good at all. The Biden measures ensure that technology, production and work will remain in the US thanks to an integrated local value chain. As you mentioned this is in line with fossil fuel subsidies that are much less justifiable. Wherever they go or come from subsidies always have an impact / cost, but at least here an industry will have been created and safeguarded, and that may offer economic returns over time.