Every legislative decision around EV tax credits is like pulling teeth, from the battle to overhaul them to this new movement to repeal them. The House has already made its proposal, but that’s just one arm of the federal government. As it turns out, the Senate wants to end the current system even sooner — Like, possibly as soon as July 4 in certain cases. This means if you’re shopping for an EV, you might want to hurry up, as if the Senate gets its way, certain lease deals could be hit particularly hard.
We’re getting the most controversial news out of the way first, because everything else here is a bit less heavy. A new report suggests McKinsey put out the option of Stellantis selling Maserati, Ontario Premier Doug Ford recently had a close brush with alleged car thieves, and Jerry Bruckheimer and Tom Cruise want to get out there and hit the pace car again.
It’s a little grab bag of everything on today’s edition of The Morning Dump, proposed car laws and industry news and unusual car crime and film. I’ll be in the seat for the next few days taking over from Matt, so pull yourself a shot of espresso and get ready to read. Happy Friday, everyone.
The Senate Wants An Abrupt End To EV Tax Credits
We all kinda saw this coming, right? After making combustion engines a platform point, the current administration is working to roll back EV tax credits. After all, when you have a majority in the House and Senate aligned with the President, it’s easier to get stuff through before midterms have a chance of realigning the legislative branch. It’s not new information that EV tax credits are on the chopping block, but some of these credits could be axed sooner than expected. While the House proposes sunsetting credits for automakers who’ve built more than 200,000 EVs starting in 2026, the Senate is proposing a far more aggressive approach, as Automotive News reports.
The Senate version, released from the Finance Committee on June 16, treats all automakers the same by ending the EV tax credit within 180 days of the bill’s passage. That proposal would also cut the EV leasing credit immediately for vehicles that don’t meet local content rules and in 180 days for those that do.
“I think the Senate version is worse, totally cold turkey, and the lease thing is so important,” said Mike Murphy, a Republican political consultant and CEO of the American EV Jobs Alliance, a pro-EV lobbying group. “Bottom line is the Senate is really trying to put a stake in the heart of EV subsidies.”
The proposed immediate tax credit discontinuation for certain leases is especially important, because many cars that don’t quality for the full $7,500 tax credit if bought due to battery sourcing and/or place of assembly do qualify for the credit if they’re leased. Not only does this make driving a new EV more affordable, it also ensures a steady supply of gently used EVs once they come off lease in order to claw back some of the leasing super-cliff we’re now facing due to a downturn in new vehicle leasing starting in 2020.
While it’s true that EV tax credits for buyers probably can’t last forever, to me it seems soon to be phasing them out. We certainly haven’t reached natural price parity with combustion-powered equivalent models across the board, and many buyers are leaning on heavily discounted EV leases for reliable, reasonably inexpensive transportation now that the EPA’ footprint rule has basically killed subcompact cars. Going cold turkey on leasing credits for vehicles that don’t meet local content rules as soon as the bill passes would be a serious blow to consumers, not to mention the 180-day phase-out for qualifying vehicles. It’s no secret that credits play a huge role in consumer appeal and affordability, and J.D. Power has some surveys to back that up.
“For customers of Honda and Volkswagen, on average, the tax credit was the No. 1 purchase reason. For brands like Tesla, Cadillac and Chevrolet, among others, tax credits were amid the top three most influential purchase reasons,” [J.D. Power EV practice executive director Brent] Gruber said.
The self-imposed deadline for deciding when and how EV tax credits will be phased out is July 4, which means if you want to lock in a deal with absolute certainty regardless of whether the Senate’s proposal prevails, you have less than two weeks. Obviously, don’t go out and panic buy a car that you don’t need, but if you’re already shopping deals or have serious plans to lease an EV within the next three months, you might want to pick up the pace a touch.
The Trouble With Maserati
Oh, Maserati. What will we ever do with you? With total global sales more than halving last year to just 11,300 units, several canceled projects including the MC20 Folgore, and seemingly no easy way forward, it shouldn’t be surprising to hear Reuters report that Stellantis is mulling a sale of the Italian brand. This latest potential avenue seems to have started after the brand contracted McKinsey, a move that is rarely considered a good sign because no matter the industry, consulting is expensive and is generally an avenue to turn to when you’ve either exhausted all resources on hand or are trying something you’ve never done before. Considering Stellantis has extensive experience making cars and running car brands, seeking the help of big consultants for Maserati doesn’t paint a rosy picture of the present.
Stellantis hired consultant McKinsey early in April to advise it on the effects of the U.S. tariffs on Maserati and Alfa Romeo as the two brands prepare future plans. Stellantis affirmed then that it was fully committed to both brands.
However, a possible divestment of Maserati, its only luxury brand, is among the options McKinsey is exploring for Stellantis, the two sources told Reuters, adding the adviser’s assessment was still in the early stages. They spoke on condition of anonymity because they were not authorised to discuss the matter publicly.
Aside from the fact that DS is also a Stellantis-owned luxury brand, it’s not surprising to hear that selling Maserati has been suggested. Part of the dark side of consulting is having a scapegoat to blame if you already want to sell an entity or strip it of its assets, and while a decision hasn’t been made yet, it doesn’t sound like a sale is entirely off the table. It’s a divisive issue that reportedly comes with internal friction.
Some board members think Stellantis is not in a position to sustainably re-launch Maserati and suggest selling it is the best option. Others think Maserati still has value and that selling its only luxury brand would be a huge reputational setback for Stellantis.
The hard part here is that both sides have compelling arguments. On the one hand, it’s hard to justify several six-figure cars with reworked Alfa Romeo bones (looking at you, Grecale and GranTurismo), but Stellantis doesn’t have a whole lot of parts bin options. What’s it gonna do, use the STLA Large platform seen underneath the Dodge Charger Daytona, or launch a Hemi-powered Maserati just to have a V8? The former still seems to need some ironing out, while the latter just wouldn’t fly. On the other, if Stellantis were to reposition Maserati, the brand could be more successful.
Looking at actual market values of products, the GranTurismo needs at least a $20,000 haircut to move it in line with the Mercedes-AMG GT, and the Grecale probably needs a price point $8,000 to $10,000 lower than where it’s at right now so it can cosy up to combustion-loyal Porsche Macan owners who’ll soon be left without a really close replacement. Right now, Stellantis’ official statement to Reuters is “Respectfully, Maserati is not for sale,” but it’ll take some serious product and strategy to rebuild the storied marque. If Stellantis isn’t able to put in the work, maybe exploring a potential sale is the best option. Maserati was doing great when Ferrari owned it, maybe it’s time to see if Maranello wants it back.
Alleged Car Thieves Reportedly Tried To Steal A Car From A Sitting Politician’s House
If you’re American and watch cable news, you’re probably now aware of Ontario Premier Doug Ford, brother of the late Rob Ford. He’s been an unexpected voice in the tariff war, and while we aren’t going to get into Canadian politics here, one thing everyone can say is that he’s certainly a visible public figure in North America. It’s not surprising that the leader of a province would have a security detail in case anything happened, and while no threats to safety have been posed, something really dumb almost happened—Global News reports that four people have been arrested on charges of possessing an electronic device for motor vehicle theft after they were reportedly caught casing Ford’s residence on Tuesday.
Around 12:30 a.m., police said officers saw people in a vehicle wearing masks and slowing down as it approached a driveway in the area of Lawrence Avenue West and Royal York Road, the area where Ford lives.
A spokesperson for Toronto police confirmed that the incident was believed to be targeting Ford’s home address.
Police said they initiated a vehicle stop and one of the suspects got out of the car to run. Inside the car, they said they found a key reprogramming device and a programmable master key.
If I were to hazard a guess, the “master key” was probably just a blank fob, but with the right fob and programming device, that can be enough to steal whichever make of car is named on the fob. Still, this is what we call instant karma, but it also points to a problem that still needs tamping down. As we’ve previously detailed, organized car theft is a big problem in parts of Canada, with stolen vehicles exported to countries with relaxed rules on what vehicles make it in. There’s no easy solution here, so it’s understandable that more and more Canadian car owners are installing bollards on their driveways.
Hit The Pace Car Again
If we’re talking about the greatest car films of all time, “Days of Thunder” with Tom Cruise has to be up there on the list. From the rental car race to the cinematography of the cars on the ovals, it works well if you don’t take it too seriously, and despite basically being “Top Gun” with cars, it’s drawn admiration from some big names including Quentin Tarantino. If you still love it, you’re going to like this tidbit of news coming down the wire.
In an interview with ET from the red carpet of “F1: The Movie”, Jerry Bruckheimer has said that he and Tom Cruise are collaborating on a sequel to the iconic NASCAR film. We don’t know much right now, as it sounds like the project is in early development, but Bruckheimer said “We’ll have something really exciting for an audience once we pull it together.”
If this ends up happening, it’s going to rule. Has everything from the original “Days of Thunder” aged perfectly? No, but give it the leeway usually needed for a 35-year-old film and it still holds up pretty well if you take merely a semi-serious approach. Plus, if “Top Gun 2” was a smash hit, who says the “Days of Thunder” concept won’t be more successful when rebooted than it was at the original box office? It feels about time we had another NASCAR film, and I’m rooting for Bruckheimer and Cruise to pull this off.
What I’m Listening To While Writing TMD
Fair warning: The song I’m about to show you isn’t exactly outstanding or critically acclaimed, but it is interesting. There’s always something fascinating about insane collaborations between people you’d never think would be on the same track. In this case, it’s Ludacris, Zakk Wilde, Chad Kroeger from Nickelback, and the second singer of Three Days Grace, Matt Walst.
See, before Walst joined Three Days Grace, he had a band called My Darkest Days, and that effort managed to pull all these artist together for a debut single called, um, “Porn Star Dancing.” I mean, Chad Kroeger makes sense considering My Darkest Days was signed to 604 Records, but Zakk Wilde is a bit left-field for this flavor of music and Ludacris was only originally supposed to be on the Canadian version, but come on. Of course Luda rapping about strip clubs would have appeal everywhere, it was only a matter of time before his feature made it to the U.S. release.
I’m struggling to find an organic reason why “Porn Star Dancing” should’ve taken off, but it was big in Canada thanks to CanCon laws and the last dredges of post-grunge popularity, and it went to number one on the Billboard Modern Rock chart in America. The zeitgeist of 2010’s early stage of recession recovery probably helped because this is the sort of trashy, lecherous guilty pleasure that could get the people going in an era of trash TV and general leering. Truly one of the more bizarre modern rock tracks, but hey, if you haven’t heard of it before, now you have an unhinged musical fact to pull out at parties. Actually, given the subject matter, maybe “pull out” is the wrong way to phrase it.
The Big Question:
How long should the U.S. continue with EV tax credits?
Top graphic credit: Kia
You couldn’t set the reputation of Stellantis any further back if you had a caboose on the brand train.
EV subsidies should stay in place until the end of 2025. The industry is mature enough to make it on its own (plenty of competitors out there), but we do need a bit of a transition period before a cutoff occurs.
Out of our 3 EVs we own, we’re only seeing the tax credit benefit on the 1 we’re currently leasing, as it helped the lease deal. Our Bolt EV we bought used before the credits were changed to be for used also so no help there, and the Ranger was a private sale so no help there.
So while we have only benefitted a little from the tax credits, I see the use of them. My issue is car makers stopped making ‘compliance’ EVs, and selling most smaller EVs like the Bolt here. The best option for those looking for cheap affordable is like a Leaf or Equinox to get it in the 20ks or lower.
I also feel like the tax credit conditions that Manchin pushed for did some real good on pushing automakers to move operations to the US.
Of course the current government style is all or nothing, but it’d have been nice to see them phase out the credits more smoothly, lower the vehicle price limit from $80k to $50k, get rid of the lease loophole to maybe refocus automakers.
Also get rid of the used EV credit, and my reasoning on the used EV credit is that’s depreciating used EVs even worse and kind of like double dipping.
As an example, our Prologue’s buyout($24k) is less than 50% it’s MSRP(52k), so after 3 years of payments less than $300 a month, we can buy the car for $24k, which is under that limit for the used ev tax credit, so potentially we could qualify for that, which brings the cost down to $19k, so if we can buy a 3 year old Prologue for $19k from the original $52k, that’s a depreciation of 64% in 3 years, that’s crazy!
Now granted as the original lessees and then if the buyers, we benefited from all that, but if somebody strolled in and actually financed a Prologue, say the $52k minus the $7500, they’re on the hook for about $45k. Depending on apr and what they put down, they could pay over double what we pay a month buying instead of leasing, and then after 3 years still be in the hole for more than the car will sell for, especially with the used EV credit further depreciating.
Long way of saying the credit is nice, but the ones it’s been benefiting most are lessees and used buyers, and it’s probably hurting the credit of those that actually choose to finance, so kind of a double edged. There’s no such thing as a free lunch.
I personally hate EVs but I think the tax credit should continue until the cost to build them becomes equal to the cost of building ICE vehicles.
Maserati has been an endless money pit for Fiat, Fiat Chrysler, and Stellantis the entire time they’ve owned it. I very much doubt it’s ever turned a profit or come anywhere close to covering its own R&D, and I really don’t think it’s intended market has ever thought of it as a viable option when cross shopping luxury cars, if they ever think of it at all. I think more people know the name “Maserati” than they do Maserati’s actual products
Really, going back, Fiat bought Maserati in the first place because De Tomaso was going under with them after trying to turn the brand into a higher volume automaker with the Biturbo, which failed, and De Tomaso had bought Maserati out of bankruptcy in partnership with the Italian government, after it crashed under Citroen ownership (Citroen had actually started the process of completely liquidating the company, before the last minute rescue deal came through.
At best, Maserati was maybe a viable company no more recently than 1972/1973, but it might actually have been longer than that
After essentially failing as a business over so many owners over more than half a century, Stellantis should just be realistic, if they knew how to turn Maserati around, they would have done it 10, 20, or 30 years ago. They can’t, they don’t have the resources, they don’t have the vision, but the brand does have value, so sell it to someone else who wants to take their own crack at it and move on
Frankly, Alfa Romeo should maybe be part of that conversation, too. Lancia is a different story, because their one model is actually weirdly, extremely successful in Italy and is a pretty low cost operation, it has to be making decent money right now. Maybe without the burden of supporting Maserati, they can double down on Lancia and strategically grow its range within Italy.
Here, here!
Maserati is to cars as MV Agusta is to motorcycle
Stellantis couldn’t turn a revolving door around, much less Maserati. Take it out back and shoot it. Together with Alfa. Merge DS back into Citroen and ram into dodge. Get rid of the unnecessary brands and associated costs (separate marketing, dealerships, etc).
It is funny how both companies had the exact same dumbass idea before they merged, like they were destined for each other. RAM and DS as their own brands has never made any sense at all, and I still don’t think consumers even fully accept them as stand alone brands, either. I know a lot of people with newer RAMs who still refer to them as Dodges
Yeah, it’s silly.
EV tax credits should have gone away eons ago. Why should the vast majority of us subsidize the purchases a bunch of relatively wealthy new car buyers?
And the thought that EV credits are helping people would would otherwise buy the cheap hairshirt subcompacts that are a money-losing proposition for automakers is asinine. And most people in that end of the market don’t pay enough tax to take advantage of them other than by leasing anyway.
EV tax credits were designed to support a developing technology – not get poor people into EVs.
If US manufacturers are going to compete in the future they need to learn how to make good EVs and the USA needs to develop a domestic supply chain. That was the goal of the subsidies in the IRA.
There is more than enough money making potential to not need this support. Did Elon really need the extra tens of billions? It’s just robbing the poor to pump up the rich, regardless of what the noble intent was. But that is the American way at this point.
A. Tesla would not exist today without subsidies.
B. Outside of Tesla US manufacturers are losing money on EVs.
A. Very little of value would be lost.
B. Then why are they making them?
Why are they making them?
A. They are required to both in the USA and abroad.
B. Electrification is the future even if the USA wants to fight it. US automakers are way behind their global competitors in EVs and hybrids.
We are basically reliving the 70’s when US automakers were contents to make land yachts while the world and then the US market moved to more fuel efficient cars. Today US manufacturers have retreated from the global market and focused on maximizing profits from 20 mpg full size trucks in the USA while the rest of the world moved to hybrids and evs.
Companies are literally in business to make profits. To be in business to be do-gooders is called being a *charity*. The US companies STILL make huge profits making land yachts, they are just taller and have no trunk lids – a rather interesting consequence of CAFE. Oddly enough, that seems to be what a large swath of THIS market wants. I have no interest in them, but that is neither here nor there, several million people per year want them. Attempting to force companies to build things their customers demonstrably do not want sufficiently to make a profit is stupid. If you want people to buy EVs, make it worth their while in meaningful ways to buy EVs. Half-assed tax credits are not the way. Make ICE punitively expensive to run – which is largely the approach the rest of the world has taken. For that matter, make ALL personal vehicles expensive enough to run to influence behavior no matter how they are powered – that has the double effect of making people make more societally rational vehicle choices, AND make them think more about how they use them. With a side-effect of subsidizing and incentivizing public transportation options.
There is no US Federal *requirement* to build EVs, nor are there any state level requirements to build them. There are a few states that are threatening to ban ICE sales (which is NOT the same thing at all), but it will NEVER happen, any more than past mandates of that sort have gone anywhere. If there is no money to be made, the automakers will simply stop doing business in those places.
First – I think both CARB’s ZEV mandate and the federal EV tax credit are poor ways to incentivize the sales of EVs. That said, my option does not change reality. The thing is – this isn’t just talk on the internet for me – I work for an automaker and my job depends on my employer meeting regulations and staying in business
The reality is in the USA automakers MUST make EVs. There is no federal EV mandate, that is true. However, CARB passed a ZEV mandate in 2012 that requires a specific percentage of an automaker’s vehicles that are sold in ZEV states to be ZEVs. Those percentages started in 2018 at 12% and steadily increase to 100% in 2035. Does anyone think that the 2035 date will hold? I don’t think so but the fact remains that today – in 2025 – we must sell ZEVs in ZEV states or pay a $20,000 fine for each vehicle we miss the percentage by.
Sorry but no, we didn’t just stop doing business in CARB states as they make up 40% of US auto sales and that is growing as more states switch from EPA to CARB. Not all CARB states have adopted ZEV rules but 16 have and they make up 36% of total US auto sales.
(A ZEV is a fuel cell vehicle, battery electric vehicle, or plug-in hybrid. PHEVs can only make up 20% of an automaker’s ZEV total)
Those mandated deadlines will NEVER hold (in the states, Europe WILL probably do it), and any company that truly aligns their business plan with them is being stupid unless something radically changes. I am not holding my breath.
Trying to sell things people don’t want enough of is a wonderful road to bankruptcy. Cheaper to just give up that market.
Automakers are required to sell EVs in 16 states TODAY. That is why they make EVs. As long as losses are less than $20K per vehicle it make sense to make an EV and sell it at a loss vs just paying the fine.
It really is that simple.
Under the heading of a broken clock being right twice a day, Trump is almost certainly going to make this nonsense go away. There really are silver linings to every cloud.
Unfortunately no – he will likely only make things worse like he did in his first term. The problem is that Trump is about the press release not the policy and generally doesn’t take the time to do things by the book – which means they get overturned in court.
Case in point – Trump just signed a bill to revoke CARB’s waiver that authorizes Advanced Clean Cars II that governs ZEV mandates from 2026 to 2035. The problem is that the Senate used the Congressional Review Act to do that because the CRA only requires a simple majority in the Senate. Both the Senate parliamentarian and the GAO said they couldn’t do that because CARB’s waiver is not a federal regulation. The Senate leadership ignored them and pass the bill anyways. They also passed the bill after the time limit for the CRA expired (It only applies a certain number of days after a new Congress takes office.) So of course CARB and CARB states sued and now it is tied up in court. That case will take years so now automakers have a choice. A. continue as if CARB will win and meet CARB requirements. B. Continue as if CARB will lose and risk facing a $20K per vehicle fine on years of production.
Even if Trump wins in court -that just means that Advanced Clean Car I is the law of the land in CARB states. Which means at least 22% of cars sold in the 16 ZEV states have to be ZEVs.
Trump has control over EPA and NHTSA – but as you correctly said – there is no federal EV mandate. The only way to remove CARB regulations at the federal level is to amend the Clean Air Act to remove California’s right to write their own emission regulations. That takes 60 votes in the Senate.
Even if Trump rolls back federal rules again – like he did in his first term – the next president can flip them right back. Trump rolled back CAFE fuel economy increases to only 1.5% a year in 2020. Then Biden won and flipped it right back with 10% a year increases to erase the effect of Trump’s roll back.
All that this back and forth does is make it impossible for companies to plan and automotive products take 4-5 years of development. (I started working on EPA 2027 three years ago.)
Same with the on and off tariffs.
Then we should also stop subsidising ICE and gasoline. Fair is fair.
I think we should tax the ever-loving-shit out of gasoline. Indeed, fair is fair.
I also think the “subsidizing” is wildly overblown.
The used EV tax credits are very good at that end of the market, in spite of the income caps which penalize single people. $4k instant rebate off of most EV or PHEV between $13k and $25k, or 30% off of anything cheaper. And as long as you get the instant rebate there is no clawback if you don’t have $4k in the tax liability(there is clawback if you exceed the income threshold.)
As much as I like GT cars — Bentley, you didn’t build the EXP 10 Speed 6 Concept, and I’m still mad — Maserati is serving a market that doesn’t exist anymore.
I like 3-box sedans. I like GTs. I like how the MC20 looks, even though it’s really confused as to what mission it’s trying to fulfill (and doesn’t fill any of them right, aside from being the best looking car on sale).
Maserati has no clear mission, and is an amalgamation of half-baked ideas, in very pretty exterior styling with some good engines, that caters to a non-existent market.
That’s Maserati’s problem, and has been for most of 20 years. Maserati is something people like as an idea, but it doesn’t meet their actual needs, so no one buys them.