The latest round of EV tax breaks could change where our cars are assembled, electric trucks Makers fight to be first on the road and flight delays exceed pre-pandemic levels. All that and more inside The morning shift for August 15, 2022.
1st gear: Tax credits could transform supply chains
Last week the legislature passed here in the US a bill that would yield a slew of new tax credits for buyers of electric vehicles. But these handouts for upgrading to a shiny new electric vehicle don’t come without their caveats, and those caveats could impact the way automakers build their cars.
The new tax breaks for electric vehicles will no longer apply the sales restrictions on such products, bringing back the $7,500 handout for many manufacturers. But in return, the government requires that any electric vehicle worthy of the credit must be made in America. And now, Automotive News reports that this demand could affect the way we build our cars. According to website:
The legacy $7,500 tax credit — with no cap on price, income, or battery content — will remain in effect through the end of 2022. However, industry experts said it will be changed immediately to apply only to vehicles assembled in North America.
Manufacturers of electric vehicles – battery electric vehicles, plug-in hybrids and fuel cells – must now decide whether to claim all, some or none of the new tax credits. Depending on their strategies, this could mean transforming their supply chains sooner than expected to rely more on credit-friendly countries, and potentially looking at alternative battery chemistries to rely less on credit-forgotten countries.
Currently, about 70 percent of EVs that currently qualify for tax credits will be not eligible once the new law comes into effect. Analysts predict it could take several years for manufacturers to shift their sourcing and production to the US to qualify for the stimulus.
With the next round of credit set to expire in 2032, one analyst told Automotive News News that the “worst-case scenario” could see automakers spending the next five years shifting their supply chain, and only four more or have five years to sell EVs that comply with the new incentives.
2nd gear: Fisker Eyes US factory
And just like that, one EV startup is already suggesting it might move some of them Production to the US to qualify for these new tax breaks.
Reuters reports that electric vehicle startup Fisker is “exploring opportunities to manufacture in the United States in 2024.” If the company could do that, its next model, the Ocean, would qualify for the next round of EV tax credits.
Currently based in California Fisker will assemble its electric SUV Ocean in a plant in Austria. Production of this model is scheduled to start in November. With the new tax credits expected to take effect as early as this Friday, Fisker Ocean buyers could miss out on the tax break. According to Reuters:
Over the weekend, Fisker said it has been reaching out to U.S. customers who have pre-ordered to ensure they have the option to retain eligibility for the $7,500 federal EV tax credit if the inflation-mitigating law is signed.
If you wanted to sneak in and buy a Fisker before the tax credits change, you can’t. Fisker says it’s sold out the Sport and Ultra variants of the Ocean SUV which should arrive in the USA
3rd gear: Electric tractor units could be here soon
If that wasn’t enough tax credit news for one Monday, here’s one last nugget to kickstart your week. The new bill also includes allowances for electric transportation vehicles with “approximately $374 billion in climate and energy spending for cleaner commercial vehicles.”
It should come as no surprise, then, that two of the loudest parties in the race are to build a fleet of electric semi-trailers have blossomed again. Shortly after the Senate passed the Anti-Inflation Act, Elon Musk tweeted that the Tesla Semi came this year, and Nikola announced this automotive veteran Michael Lohscheller would be promoted to CEOsignaling his renewed desire to succeed in space.
According to Bloomberg:
As with passenger cars, trucks must also meet strict requirements in order to be eligible. Battery materials must come from countries with which the US has free trade agreements, and not countries of concern like China. While it’s unclear how many will meet the criteria, battery-powered big rigs are definitely coming.
In March, shipping giant Maersk announced it would buy 110 Class 8 electric vehicles from Volvo Trucks. Nikola wants to deliver at least 300 trucks this year, and Daimler Truck also has electric models on the road.
As part of the new tax break, each electric truck sold will receive a $40,000 rebate. But despite that powerful stimulus, Musk previously said he was “not thinking at all about Biden’s signature economic package.” I appreciate his sudden acceleration of the semi-timeline is it all just a pleasant coincidence?
4th gear: Usain Bolt left His electric scooter all Above
If it’s not electric cars and trucks that are taking over our streets, then they are sophisticated new forms of electric individual mobility. Things like e-bikes, skateboards, and scooters fill city streets as commuters look for new ways to get around the city. But despite their rising popularity, one electric scooter company in the US is struggling
Founded by Olympic gold medalist Usain Bolt, Bolt Mobility has littered US cities with malfunctioning electric scooters and e-bikes. The company was forced to downsize its scooter rental business in several US markets as funding dried up. According to Automotive News:
Bolt Mobility said in an Aug. 3 statement on its website that investors had not kept their promises to the company, forcing it to “significantly scale back operations.” It said franchisees would continue to operate in 25 markets but would have to exit eight that were under the company’s control.
TechCrunch reported that the markets Bolt left were Portland, Ore.; Burlington, South Burlington and Winooski, Vt.; Richmond, California; and St. Augustine, Fla. Officials in several cities said the company disappeared without warning or explanation.
The company, founded by the eight-time Olympic champion, has reportedly abandoned hundreds of bikes and scooters in US cities. Bolt Mobility says it is working with local franchises to collect the abandoned bikes from markets where it no longer operates.
in an opinion, Said Bolt Mobility that 25 of its 33 stores are now independently owned. For the remaining eight markets, the company hopes “upcoming, agreed investments” will keep the services going.
5th Gear: Flight Delays in USA Top pre-pandemic levels
If you want a sign that things are getting back to normal after two years of Covid-19, look at the airports. After falling sharply due to lockdowns and restrictions, travel numbers began to rise again earlier this year as such measures were eased. But now, with passengers returning to airports, the sector is struggling to keep up with demand, bringing flight delays and cancellations back to pre-pandemic levels.
That’s correct, Reuters reported that more flights were delayed or canceled in the US in the first seven months of this year than in the same period of 2019. According to Reuters:
According to data from flight-tracking website FlightAware, US-based airlines canceled 128,934 flights from January to July, up about 11% from pre-pandemic levels. Flight delays have also reached almost a million this year.
American Airlines Group Inc canceled 19,717 flights, the most among major US airlines, followed by Southwest Airlines Co with 17,381 flights. Delta Air Lines Inc reported the fewest cancellations at around 10,000 flights.
Delays and cancellations have been caused by everything from unpredictable weather to a shortage of pilots and other key airline employees. The spike in cancellations comes as the number of travelers is getting closer to pre-pandemic levels.
And it is not only in the USA that such issues are taking hold. in the last few months, London’s Heathrow Airport is in trouble to keep up with passenger numbers despite previously being one of the busiest airports in the world.
Conversely: I found a shortcut
Neutral: What makes a good taxi?
I have visiting family from the UK for a few days and they were disappointed that their taxi from the airport to NYC was not a Crown Vic. IIs there a car on offer today that could fill the void it left? Everything has to be better than the Toyota SUVs and Nissan vans.