LIFO Tax Relief Bill for Dealers to Be Reintroduced in House

First Up 02/01/23

LIFO Tax Relief Bill for Dealers to Be Reintroduced in House

U.S. Reps. Dan Kildee, D-Mich., and Jodey Arrington, R-Texas, plan to reintroduce legislation that would provide tax relief to dealerships that use the "last in, first out" inventory accounting method and have struggled to maintain inventory levels because of the global semiconductor chip shortage. The bill — known as the Supply Chain Disruptions Relief Act — would give dealerships up to three years to replace their inventory before having to pay taxes on inventory sales from 2020 or 2021, giving dealers time to restock their inventories as the chip shortage eases and auto production returns to pre-pandemic levels. The latest effort comes after the Senate in December unanimously passed its version of the bill, which was introduced in late April by Sen. Sherrod Brown, D-Ohio. However, the House adjourned at year end without voting on it because of timing issues and a constitutional clause that requires revenue measures or tax bills to start in the lower chamber, Kildee told Automotive News. "We would have had to go through a pretty difficult procedural process and hold both the House and the Senate in [session] in order to get this done," he said in an  interview. Click here for the full story.

The State of Electric Vehicle Sales in the United States

Electric vehicle sales in the United States are an interesting subject. Despite having well over 200 million licensed drivers, the number of those drivers that purchase electric vehicles is well below that of many countries worldwide. And while the United States did see a sharp increase in electric-vehicle registrations at the start of 2022, bringing EV share of the overall market up to a historic 4.6 percent, electric vehicles still account for a small portion overall compared with the rest of the world, which reached an 11 percent share in 2022 — and is light years behind the numbers that European countries such as Norway and Iceland put up. Autoweek reports, EVs comprise almost 80 percent of new vehicle sales in Norway, and in Iceland the number is a still respectable 60 percent. The automobile market varies greatly from place to place within the U.S. itself. Californians buy more EVs than drivers in any other state, which also extends to plug-in hybrid and hybrid sales numbers. Market share for electric vehicles tends to be strongest in metropolitan areas, but the numbers drop sharply in less densely populated rural areas. Click here for the full story.

Mercedes Updates GLE Models for 2024 Model Year

Mercedes-Benz continues to improve its GLE and the AMG model for the 2024 model year, including exterior and interior tweaks and a slew of tech updates. Updating the latest edition of the luxury performance in the midst of its current run reflects just how hotly contested the segment is these days. Performance and technology blend in a top-flight combination of luxury transportation, reports The Detroit Bureau. The exterior continues its evolution with a more upright look overall but softer angles aiming to give the SUV “a distinctly more modern appearance,” according to the automaker. The new front bumper provides more visual presence, while standard LED High-Performance headlamps complement the distinctive daytime running light design. So often it’s on the interior where Mercedes shines and this version is no different. Again, moving toward a more modern aesthetic, the GLE uses a new steering wheel with sensor surfaces on the horizontal spokes. The interior is also elevated by the chrome finish of the center and side air vents — once only found in the Mercedes-Maybach GLS. Click here to learn about the updates.

Volkswagen Group Has No Plans to Slash EV Prices Anytime Soon

In response to any potential EV price war that may have been ignited this month by Tesla and now Ford, the CEO of the Volkswagen Group noted, that the corporation and its affiliated brands intend to leave their options open. CBT News reports, VW Group CEO Oliver Blume reaffirmed that VW will not engage in the EV price war. Additionally, he claimed, “we have a clear pricing strategy and are focusing on reliability. We trust the strength of our products and brands.”  In order to compete in the market, several companies dropped the pricing of their electric vehicles almost immediately following Tesla. The price reductions are problematic for the developing EV sector because only Tesla and a few Chinese manufacturers currently have the economies of scale and production efficiency needed to do it.  Because many manufacturers and startups have succeeded in a growth-first approach, it was important to highlight that VW will not sacrifice profitability for volume. Click here for the full story.

America's Car Repossession Rates Are Rapidly Climbing

More Americans are falling behind on car payments these days than before the high inflation, cooling job market, and other challenges other challenges that are keeping millions awake at night. Unfortunately, this leads to a growing number of auto repossessions, and the trend is expected to continue. Carbuzz reports, the number of subprime auto borrowers in December who were at least 60 days late on their payments increased by 5.67 percent, up from a seven-year low of 2.58 percent in April 2021. For a greater perspective, the rate was 5.04 percent in January 2009 when the Great Recession was at its peak. High interest rates are simply making it more and more challenging to make those monthly payments. In December 2022, the average new car loan rate was 8.0 percent, an increase from 5.15 percent the year prior. For subprime borrowers, the rate is typically higher. One individual interviewed had their 2013 Dodge Journey repossessed after they fell behind on the monthly payments. The monthly bill for his car hit $1,000, including insurance. Why is that so insanely high? Because of an equally insane 26 percent interest rate. Click here for the full story.

Around the Web

Hyundai Ioniq 6 Achieves Target of Up to 361-Mile EPA Range [Carscoops]

Volkswagen Considering Battery Cell Factory in Ontario [Reuters]

Car Quiz! Do You Know the State Where Your Vehicle Was Built? [Fox News]

2024 Range Rover Velar Unveiled With Minimal Exterior Changes and Substantial Interior Upgrades [Carbuzz]