Toyota has sold its 200,000th plug-in vehicle in the US, meaning access to its $7,500 federal tax credit will be discontinued over the next 15 months.
The company joined Tesla and GM no longer eligible for the credits, with Ford and Nissan also expected to hit the cap later this year.
The credits are designed to decrease gradually, so those with an existing Toyota order will still receive the full credit as long as they pick up the goods before the end of the quarter.
Since Toyota sold its 200,000th plug-in vehicle last quarter, that means the full credits continue through the end of this quarter (September 30). There will then be a credit halving to $3,750 available for the next two quarters and $1,875 for the following two quarters. These credits have no unit limit, so Toyota can use them for as many plug-ins as it can sell in that time period.
This moment may come as a surprise to many (although Toyota warned us about it in April), as Toyota has yet to actually sell any BEVs. It had a short-lived RAV4 EV program in the early 2010s, with electric powertrains provided by Tesla, but that number only accounted for about 2,500 units. And recently it finally shipped its first BEV, Toyota bZ4Xbut only a few thousand of them have been sold so far (and are now being withdrawn for prevent the wheel from falling).
But Toyota has been selling all of its entry-level plug-in hybrids, with the original 5.2kWh Prius Plug-In and 8.8kWh Prius Prime (which we at Electrek not a fan of). The US federal tax credit applies to plug-in vehicles with more than 5kWh worth of battery storage, with a benefit of $500/kWh until the $7,500 limit is reached.
So low-end cars like the Plug-In Prius with a battery that nearly crosses its threshold are only eligible for a possible minimum credit of $2,500, while the Prime gets $4,500. The newer RAV4 Prime PHEV has an 18kWh battery, which is enough to get the full $7,500 credit.
Because of all this plug-in hybrid sales, Toyota has used up its 200,000 credits largely on low-range hybrid models, leaving a large chunk of the credit value across the board.
Now, the company has finally started selling BEVs with the bZ4X, but a slow start. Toyota is only expected to sell around 7,000 units this year, meaning only a few thousand BEV customers will benefit from the full tax credit that comes into effect three months from now. . That is assuming it can handle current recall issues quickly.
We wrote a lot about the shortage of Toyota (or Totally hostile) EV strategy, and here’s another sign of it. Instead of creating attractive electric cars, it looked at the regulations and came up with a PHEV with “minimal amount of sophistication. “Toyota increased the battery size of the Prius to the minimum to qualify for EV credits and carpooling stickers while others in the industry are actually taking steps to make better EV cars.
As a result, Toyota missed out on hundreds of millions of dollars worth of credits to its customers, and worse, its new EV now looks a lot less exciting than other EVs in its class like the ID. .4, EV6 and Ioniq 5. These are not only better cars (as manufacturers have worked out some of the twists and turns with previous-generation EVs) but also cheaper when taking the credits into account.
One of the repeated downsides of the EV credit design is that it can award prizes to latecomers in the market. Companies that take EVs seriously and hit the market early, then run out of credit, end up at a disadvantage against other EVs in their class that come later and can still benefit from credit.
But Toyota doesn’t even have that for it, as they’ve spent a lot of their allocation on partial credits for the Prius Plug-In and Prime. So now it has the worst of both worlds – late entry to the market, a lackluster first generation EV when everyone else is second or third generation and no take any credit for making its car look more appealing than it currently is.
For years it has been said that the emerging power companies are dominating while the market is small, and as soon as the big traditional carmakers decide to take EVs seriously, they will rush in and crush them. startups with their outstanding expertise. But Toyota’s push with the mid-range bZ4X and its continued missteps in its electric vehicle strategy suggest that perhaps it doesn’t have a secret master plan after all. And unless Toyota takes action, it could be quite disastrous, both for it and Japan in general.
All that said, it’s likely Toyota could gain access to the US EV tax credit again if the bill to extend it is passed by Congress. The House approved the Build Back Better bill This will not only extend the line of credit to all manufacturers, but will also make it easier for electric vehicle buyers to apply. But this much needed infrastructure and climate package was blocked by all 50 Senate Republicans and a Democrat invested in coalalthough the senators who support this bill represent tens of millions more Americans than those who oppose it, and the public consistently supported the bill by wide margin.
There are a few sign of life for the bill, but it has been stalled for over a year now. So if you want electric cars to be more affordable in a time when gas prices are high and climate change – the biggest problem humanity has ever faced – needs to be addressed, then that problem should be taken. on the ballot this November.
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