The two main political parties in the United States are so diametrically opposed to one another that they disagree on nearly every major policy recommendation, especially in reference to the economy.
President Biden signed the partisan “Inflation Reduction Act” on August 16, with full Democratic support in the Senate, but with zero Republicans voting “yea”.
The reality is the CBO announced that they are forecasting very little to zero reduction in inflation from the massive spending in the legislation, but the Parliamentarian of the United States Senate allowed the reconciliation bill to go through anyway.
In the legislation, federal tax credits of up to $7,500 will be available for those who buy certain EVs, those that are assembled in North America.
“American auto companies, along with American labor, are committing their treasure and their talent — billions of dollars in investment — to make electric vehicles and battery and electric charging stations all across America, made in America,” the president said at the bill’s signing.
Well, there are a few obvious problems right out of the chute.
First, only those with high income, and thus have a large tax liability annually, will actually qualify to use the $7,500. Most middle-class tax filers, will not be able to take much or any of the credit, leaving them to pay for all the costs of the vehicle.
Secondly, Ford and GM both announced they raised their electric car prices following the announcement of the Democrats’ Inflation Reduction Act going into effect.
The price of Ford’s Mustang Mach-E will see up to an $8,475 increase next week due to what the company says are “significant material cost increases” and “evolving market conditions.”
Buyers will face a higher price tag on the electric vehicle (EV) when order banks for the 2023 model reopen on Tuesday, CNBC reported.
“Ford is adjusting the MSRP on the Mustang Mach-E due to significant material cost increases, continued strain on key supply chains, and rapidly evolving market conditions, and will continue to monitor pricing across the model year,” the Michigan-based motor company said.
The Mustang Mach-E 2022 models were priced between 44,000 and $62,000, but the 2023 makes of the EV will cost as high as $70,000 with the cheapest option being $47,000. Earlier this month, Ford also increased prices on its electric pickup truck, the F-150 Lightning, for similar reasons, according to CNBC. Tesla, Rivian, Lucid, and GM have also raised prices on EVs this year.
Car manufacturers are increasing EV prices as materials such as cobalt, lithium, and nickel have become harder to get, with China dominating cobalt and lithium production. That, coupled with supply chain issues, resulted in the cost of raw materials for EV production doubling from March 2020 to May 2022.
“Due to significant material cost increases and other factors, Ford has adjusted MSRP starting with the opening of the next wave of F-150 Lightning orders,” Ford explained in a press release.
The Inflation Reduction Act extends the consumer tax credit of up to $7,500 for new electric vehicles until 2032 and adds another credit of up to $4,000 for purchases of a used electric vehicle.
The measure includes a cap of $55,000 on purchases of new retail electric cars and a cap of $80,000 for electric trucks, vans, and SUVs. It also includes more stringent requirements on sourcing and production in order for vehicles to be eligible for the credit.
As a result of their price increases, some of the Ford and General Motors electric vehicles subjected to the price hikes will top the cap and therefore be ineligible for the tax credit. For example, the big-battery version of the Ford F-150 Lariat now costs $87,769, up $8,500, Car and Driver reported.
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Conservative independent talk show host and owner of https://MAGABOOK.com. USMC Veteran fighting daily to preserve Faith - Family - Country values in the United States of America. Check out my podcast - https://www.spreaker.com/show/finish-the-race
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