Revised EV Tax Credit Bill Could Open Doors For Dealers

Greetings,

The end of daylight savings time means many of us are now in the dark for longer. But one thing dealers shouldn’t be closed off from is info about falling used car prices. Think about it, the value of your second-hand inventory is dropping every day. So, staying informed is vital.

Another thing to keep an eye out for (if you sell EVs made outside the U.S.) is new legislation that hopes to restore tax credits to non-qualifying EVs. The Senate bill would allow affected automakers time to launch or expand their U.S. manufacturing.

And that’s not the only development in the EV world. Volvo has debuted a flagship SUV (an EV, of course) that cleverly takes on rivals and takes advantage of those tax credits. But wait, there’s more. Honda is seeking to make amends with its U.S. dealers after cutting these retailers out from the automaker’s EV joint venture with Sony.

Cheers!

Market At A Glance

Bruce Springsteen fans will recall his song, “I’m Going Down.” It’s a title that may ring familiar if you’ve been following the CarGurus Index of used car prices. This data continues to report a steady downward slide in the average transaction price for pre-owned cars. As of this writing, that number stands at $29,582, a $116 fall in one week. 

Breaking Headlines

• Rivian demand remains strong, CEO says after $1.7B Q3 net loss - Autonews

• Carvana stock plummets as used car prices fall - CNN Business

• Cox automotive sells much of Canadian ops - Autonews

• 26 Cars Stolen From NYC Dealership in Single Night - NBC New York

• Mazda grapples with tight labor at U.S. plant as it struggles to ramp up CX-50 - Autonews

• More than 70 cars burn in grass parking lot near Temple, Texas - WildfireToday

Dealer Essentials

• A digital shift: Dealer groups adjust as more customers turn to omni-channel sales - Autonews

• Tesla’s Found a Way Around Direct Sales Bans by Putting Dealerships on Tribal Lands - TheDrive

• U.S. dealership average pay surpasses $100K while turnover tumbles - Autonews

• Report shows rapid growth in electric vehicle sales and dealership investment - Yahoo Finance

• Honda's revamped Accord to offer 4 well-equipped hybrid trims - Autonews

• EV registrations in U.S. up 57% through September as Tesla rivals turn up pressure - Autonews

New Senate Bill May Make Asian and European EV Makers Happy

The recently enacted Inflation Reduction Act had winners and losers regarding EVs. Automakers with U.S. manufacturing and materials sourcing are rewarded with generous consumer tax credits, while other carmakers got left out in the cold. That left brands like Audi, Toyota, and Hyundai grumbling about the legislation’s buy-American requirements being anti-competitive. Complaint filings with the World Trade Organization were rumored soon after that. It coincided with diplomatic objections raised by Germany, France, Japan, South Korea, and the European Union.

But, a proposed U.S. Senate bill, the Affordable Electric Vehicles for America Act (AEVAA), would help America kiss and makeup by seeking to push back assembly and source mandates by up to three years. If passed, the measure would enable certain EVs to qualify for federal tax credits, a potential boon for dealers now cut off from these incentives.

Volvo Carves Out a Unique Niche (For Now) with the EX90 EV

Another day, another EV announcement—that’s standard stuff these days in the car business. But, Volvo’s launch this week of its all-new flagship EX90 EV SUV seeks to give the Swedish brand a unique position in the burgeoning U.S. gasless vehicle marketplace. 

Let’s get some of the basics out of the way. The EX90 is a three-row EV with a promised range of up to 300 miles. In top-tier form, Volvo pledges the car will deliver 496 horsepower and a 0-60 mph time of 4.7 seconds. Those are not bad specs for a family hauler. 

But it’s the price tag that’s worth taking note of, as the automaker is touting that a well-equipped EX90 will run “under $80,000.” That substantially undercuts the $100,000+ starting prices for the Tesla Model X and Mercedes-Benz EQS SUV, both premium three-row SUVs. The cost for the Rivian R1S comes close to the EX90, but buyers will have to shell out at least $84,000 to have a similar range. 

And the $80,000 threshold has even greater significance as it marks the cut-off for federal EV SUV tax credits under the Inflation Reduction Act. Volvo will start building the EV90 at its South Carolina plant in 2024, making the EV eligible for some or all of the incentives (Volvo hasn’t shared any details on this).

Honda Tosses a Bone to Its Dealers

The direct-to-consumer selling model employed by some budding automakers undoubtedly fails to sit well with conventional dealers. Add in that established brands are eyeing a D2C approach, and blood pressures rise for everyone, starting with dealer ownership and management. 

A case in point is the recently announced joint venture between Sony and Honda to produce 

EVs under the Sony Honda Mobility banner. The effort calls for vehicles to roll out of a planned Honda facility in Ohio starting in 2026. But, sales pursuits won’t include the automaker’s 1000-plus dealer dealership network in the U.S., an action that caused many Honda dealers to cry foul.

In an effort to appease these retailers, Honda executives are reportedly involving U.S. dealers in servicing the new EV line. That’s the word from Automotive News in reporting on comments from CFO Kohei Takeuchi.  

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