The GREEN Act: What EV Buyers need to know!

The GREEN Act, short for “Growing Renewable Energy and Efficiency Now Act of 2021” was introduced by Representative Mike Thompson on February 4, 2021 and this bill could provide tax credits for new and even used EV purchases in some cases, and there’s some things you should know if you are looking at purchasing an EV in the near future, especially from Tesla and GM.

So I’ll talk about what is being proposed, where they are currently in the legislative process, as well as my thoughts on if you should wait to buy an EV for when these tax credits may be available.

This bill is all focused on amending the existing Tax Code to extend it to more vehicles.

The GREEN Act would reinstate this a bit, but with a few changes.

First, it would add a “transition period” which reduces the credit by $500 after a manufacturer sells 200,000 vehicles, and before they sell 600,000 vehicles.

Once the 600,000th vehicle from a manufacturer is sold, they enter that phaseout period, just like before, and the tax credit is reduced the same way;

(A) 50 percent for the first 2 calendar quarters of the phaseout period,
(B) 25 percent for the 3rd and 4th calendar quarters of the phaseout period, and
(C) 0 percent for each calendar quarter thereafter.

This means for any manufacturer that has hit the 200k vehicles sold mark, customers are eligible for a $7000 credit until that manufacturer hits 600,000 vehicles produced and sold.

The bill was also written to include an “exclusion period”, which excludes any vehicles after the 200k mark and up to the enactment of the GREEN Act, so any vehicles sold in that time frame are not counted towards the 600,000 vehicles, when the manufacturer enters the phaseout period.

This transition period really only affects Tesla and GM, as they are the only ones who have hit that 200k mark, so it looks like if this bill passes both Tesla and GM buyers will get a tax credit for another 400,000 vehicles.

The GREEN Act also amends the tax code to include a tax credit for USED vehicle purchases, but there are a few more stipulations here.

The credit for used vehicles would be $1250, and if the battery capacity exceeds 4kWh, an additional $1250 and $208.50 for each additional kWh over 4. With a limit of 30% of the sale price of the vehicle. But there are some limits on that:

The credit is then reduced by $250 for each $1000 your taxable gross income exceeds $30,000, or twice for joint tax returns.

--My Tesla accessories--

--My Camera Gear--
Rode VideoMic
Disclaimer: These are referral links and I may receive a percentage of profits from products sold.

#GREEN #Congress #Tesla

Music from Punch Deck:

---FOLLOW ME ON SOCIAL MEDIA---

[Joeylikecoffee]

This is the exact reason why I’m waiting to buy a Tesla. I don’t plan on buying for at least 6 months..so based on this timeline, I should be on the mark...assuming that it does become an actual credit. Thanks for covering this, well done.

Why do we need legislation to do something that is more efficient?
They just want me to pay for thier cars.
No

[briancmiller]

Great video. I hope this passes but I’m not waiting. It requires a 60-vote Senate majority to avoid the filibuster. It has to be voted on in the House first. Congress is stuck on Covid relief now, and there’s infrastructure, immigration, more stimulus spending, and other legislation waiting. Maybe the Green act is more likely to make it through this year...but I wouldn’t bet on it. And I need a car now - I’m taking delivery of a standard range Model Y this week!

[dannyschacht]

What about the $10k for EVs made in America and the $12.5k for EVs made in American in UAW factories? Any news on those?

[RatherBeJetSkiing]

We normally get a tax refund so I'm trying to figure out how to be able to get the credit. Interested in getting a Ford Lightning IF I can take full advantage of the credits.

[BRBallin]

I was thinking about buying a Model 3 back in late Feb 2020, but had a hunch about this COVID thing and waited it out when my parents suggested that I do. Now it's been more than a year and I'm super glad I waited. Tesla lowered the price by $3000 for the AWD model I want and there's a new California $1.5k instant rebate too. Now the news of this gives me yet another reason, but I have so much pent up desire to get one. My family of 4 has 3 full paid off cars with no issues with any of them. We can't go anywhere nowadays so it's unfortunate that I went from needing my own car to not needing to add one for a long time.

[sergiosergio]

One question to get the $7000 credit you must owe taxes to the IRS, at the end of the year I usually do not owe any money since on each payday estimated taxes are already deducted from the paycheck, is it necessary to stop the tax deductions so that at the end of the year you owe them over $7000 in federal taxes?

[tbond]

I plan to get the 7 seater Model Y. I’m not in a hurry and the possibility of $7000 is too much to pass up. Yes the $7000 would be dollar for dollar for me.

[galahad]

Even though I'm still 16 I've always been dreaming on buying an EV

[nukem]

Would be nice to see this pass, but yeah, gov't. It sounds like minimum 6 months before this goes anywhere. We'll have to keep an eye out and hopefully the bill can get passed sooner than later!

[daveb]

Just to throw a twist into things for perspective future Tesla owners. If you're considering FSD (Full self Driving) $10, 000 in your selection vs a monthly subscription that will soon come in this quarter. You might want weight in this decision sooner if you're looking at this option. Especially since Musk stated the $10, 000 purchase will be a better option financially. Wait to see what monthly charge will be I guess.

[norikoabe]

Do you know any movements on this? I have been checking the government site but no progress has been made.

[danielbustos]

This is a $7, 000 tax credit
Meaning if you don’t owe $7, 000 in taxes you can’t take advantage of it?

[michael]

How does it count the time, the moment of order/delivery? Would it be too late to order after it passes?

[tommckinney]

Thanks for breaking this down. Good summary.

[infotime]

I'm about ready to buy. I could wait 6 months maybe, but not a year. Wish there was a way to know when this will take effect and the odds that it actually will.

[firesans]

Great! I recently was viewing and planning to purchase the new Tesla model X refresh and this should help. Thanks!

[KenyareRC]

Hopefully I get my model 3 in August🙏🏽🙏🏽🤞🏽🙏🏽

[MrMvms]

So what do you think; do vehicles purchased in 2021 prior to the date passed (if I does in 2021) get to take advantage of this? I understand the 400, 000 starts after passing but what happens to the people who buy one the day before the bill passed?

[ThePlthompson]

I'm genuinely curious after looking into this a bit. Do you think offsetting this tax revenue, in addition to driving down the demand in the used market will have a negative impact on the goal to transition away from combustion engines? Just taking a quick look I'm concerned we may see a sharp decline in the value of used and new combustion engine vehicles. Appreceate the video outlining this program! I'm just honestly concerned it might have the opposite effect causing non electric vehicles to stay the primary choice for a longer amount of time. Thanks!