These 20 electric vehicles will keep their tax credits for now

These 20 electric vehicles will keep their tax credits for now
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There are 20 EVs that will qualify for the $7,500 EV tax credit by the end of the year, the US and Mexico are ending a labor investigation at a Mexican Stellantis plant, and Warren Buffet doesn’t seem concerned about the auto market close. All that and more inside The morning shift for Wednesday (my boys), August 17, 2022.

1st gear: The 20 qualifiers

President Biden signed the Comprehensive Tax, Climate and Health Act into law Tuesday, and the administration now says about 20 models remain eligible for the up to $7,500 electric vehicle tax credit through the end of 2022.

That being said, the law will immediately end loans for nearly three-quarters of the 72 models who were previously eligible. That’s because to qualify The EVs must now be assembled in North America.

The number of eligible vehicles is expected to change on January 1, 2023 when new restrictions on batteries and mineral sources and price caps come into play. The Alliance for Automotive Innovation, an industrial trade group, says it will make all or nearly all electric vehicles illegal. Out of Automotive News:

The automaker group said it will work with the administration “as it issues important guidance and new regulations – to make the EV tax credit as available and as beneficial as possible for consumers.”

Currently eligible vehicles are 2022 model year EV or plug-in hybrid electric versions of the Audi Q5; BMW X5 and 3 Series plug-in; Ford Mach-E, F-Series, Escape PHEV and Transit Van; Chrysler Pacifica PHEV, Jeep Grand Cherokee PHEV and Wrangler PHEV; Lincoln Aviator PHEV and Corsair plug-in; Clear air; Nissan Leaf; Volvo S60; and Rivian, R1S and R1T. The 2023 Nissan Leaf, BMW 3 Series and Mercedes EQS are also eligible.

Some models are built in both North America and overseas, and consumers should check vehicle identification numbers to ensure eligibility, the Treasury Department said.

Buyers can still qualify if they had binding written contracts prior to Biden’s signing, and some automakers had asked customers to make portions of down payments non-refundable in order to qualify.

The law also makes General Motors and Tesla vehicles eligible for tax credits starting on January 1. They had previously lost the credits after hitting the old 200,000-vehicle per manufacturer cap. However, it’s not clear if any of the vehicles they make would qualify under the new restrictions.

2nd Gear: U.S. and Mexican Labor Probe Ends

The U.S. and Mexican governments have resolved a labor dispute with a Mexican Stellantis manufacturing plant.

The agreement at Teksid Hierro de Mexico is the fourth labor probe to end under the 2020 United States-Mexico-Canada Agreement (USMCA). It was one of Mexico’s longest-running labor conflicts.

U.S. labor officials said workers at the plant, which makes parts for heavy vheicles including Cummins, Volvo and Mack, were previously denied their rights to choose their union and do collective bargaining. From Reuters:

Reuters reported last week that Teksid, which employs about 1,500 people, expects to settle the case without going before a disputes body after the company recognized an independent union, a shift in workers attributed to US pressure under the USMCA becomes.

Workers had campaigned since 2014 to form a union called The Miners at the Teksid plant in northern Coahuila state, accusing the company of colluding with a powerful rival union to block their efforts.

The USMCA resolution “will help end eight years of abuses against garment workers,” US Secretary of Labor Marty Walsh said in a statement.

As part of the deal, the unit of Italian-French automaker Stellantis agreed in July to reinstate for pay 36 workers who said they were fired in retaliation for supporting the union, which also represents metalworkers and miners.

Stellantis says it is “working diligently” with government officials during the process. The company says it respects the right to collective bargaining and will comply with local laws.

3rd Course: Buffett isn’t worried

Not Warren Buffett seem to think the good times for car dealers aren’t over yet. New filing shows that Berkshire Hathaway tripled its stake in Ally Financial, a longtime auto finance company, to $1 billion in the second quarter of 2022.

The world’s most famous investor seems to believe that credit margins will remain high and default rates low. Out of financial times:

Over the two years of the pandemic, Ally’s shares have soared 57 percent. The stock was boosted by consumers pouring in cash to buy used vehicles. The car manufacturers could not meet the demand for new cars.

Ally shares are down a quarter so far in 2022. Wall Street is worried about US consumer finances and a normalization in the auto market. Ally says those worries remain overblown, a view that now has the implied support of a legendary investor.

Between the end of 2019 and the beginning of 2022, the Manheim used car value index rose by a staggering 70 percent. Higher used car prices supported larger loans at a time when there were virtually no concerns about immediate loan losses.

Net interest income increased significantly in the current quarter compared to 2021. However, Ally was forced to accrue so high a loan loss reserve that pre-tax profit fell 40 percent from a year earlier. The company insists these provisions are simply a natural return to normal levels.

The move is a vote of confidence not just in auto loans, but in consumer spending power overall. If Warren isn’t concerned about our ability to spend money confidently, why should we be concerned?

4th gear: BMW’s Battery Switch Up

China’s EVE Energy CO Ltd will begin supplying BMW with large cylindrical batteries for the company’s electric cars in Europe. It is reported that BMW is following in Tesla’s footsteps in adopting the new technology. Vehicles with the new batteries are expected to hit the market in 2025.

Earlier this year, Tesla began manufacturing its new 4680 large-format cylindrical battery. 4680 means 46 millimeters in diameter and 80 millimeters in length. Tesla expects the new battery to reduce production costs and improve range compared to the current-generation cylindrical 2170 batteries.

EVE’s batteries are expected to be similar in size to Tesla’s. Out of Reuters:

EVE, a supplier to BMW in China, did not directly respond to Reuters requests when asked for comment. BMW said it plans to release some battery-related news in early September but declined to comment further.

The switch from BMW, which currently uses prismatic batteries, underscores the growing momentum for large format cylindrical batteries. Prismatic batteries, which are rectangular in shape, have become the most common form of car battery over the past two years because they can be packed more densely, which saves costs. However, proponents of cylindrical batteries argue that improvements in energy density have made the newer large-format cells more cost-effective.

China’s CATL (300750.SZ), the world’s largest battery maker, is also set to supply cylindrical batteries to BMW from 2025.

Expectations are high that these batteries will also be large-format cells. CATL did not respond to a request for comment on the planned dimensions.

At the moment it is not clear how many batteries BMW wants to get from EVE and CATL.

5th gear: Powerless

Toyota has suspended operations at one of its plants in China after local authorities issued an order to save electricity. According to a company spokesman, the production facility will remain closed until Saturday.

Sichuan province, where the plant is located, is rationing industrial electricity consumption during the worst heat wave in 60 years. It has prompted manufacturers of fertilizers, lithium and other metals to shut down plant operations or scale back production. Out of Reuters:

Industrial users in 19 out of 21 cities in the province have been ordered to halt production from August. Aug. 15-8. 20 to prioritize power supply for homes, said a notice issued Sunday by the Sichuan Ministry of Economy and Information Technology.

“We are monitoring the situation every day and following the government’s instructions,” said the Toyota spokesman.

Toyota wouldn’t say how much vehicle performance would be affected by the suspension.

Reverse gear: up!

This is transport content if I’ve ever seen it.

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