Manchin Bill Would Immediately Cut Off Credits for EVs That Don't Meet Battery Rules

First Up 01/25/23

Manchin Bill Would Immediately Cut Off Credits for EVs That Don't Meet Battery Rules

Sen. Joe Manchin, D-W.Va., plans to introduce a bill that would direct the Treasury Department to immediately stop issuing $7,500 consumer tax credits for electric vehicles that do not meet strict critical mineral and battery component requirements. The bill — titled the American Vehicle Security Act — would amend the Inflation Reduction Act so that the effective date of the required EV battery sourcing is no longer tied to Treasury's release of proposed guidance on the restrictions. If enacted, no credit would be available to any new EV that does not meet the critical mineral and battery sourcing requirements, effective retroactively as of Jan. 1. A Democratic committee aide told Automotive News the bill did not yet have bipartisan support or co-sponsors because it had not been shared outside internal discussions. It also had not been shared with any auto industry representatives, the aide said. Treasury is planning to issue proposed guidance on the consumer tax credit's critical mineral and battery component requirements in March after missing its year-end deadline in 2022. It also will issue a proposed rule-making that further clarifies key provisions already in play, such as price caps and how vehicles are classified. Click here for the full story.

Rising Interest Rates Are Less of a Concern for Subaru Dealers

Rising interest rates aren't a problem for the Subaru market, though buyers seem to be bringing more cash to deals, according to Subaru National Retailer Advisory Board Chairman Jeff Williams. "Is it affecting customers buying cars?" Williams, a vice president at Williams Auto World, which owns Williams Subaru in Lansing, Mich., said of interest rate growth. "No. I don't think so." The difference between a 3 percent and 5 percent interest rate "isn't that big of a deal" to a car purchase, he told Automotive News on Dec. 13, the day before the Federal Reserve upped its benchmark rate another half point. The average new-vehicle loan carried a 5.2 percent interest rate during the third quarter, up from 4.1 percent a year earlier, according to Experian. The average used-vehicle loan rose to 9.3 percent from 8.1 percent during that time. Subaru retailers are seeing both more cash purchases and larger down payments on new- and used-vehicle transactions, Williams said. He said his dealership has seen more cash buyers than he'd encountered in "quite some time," and described receiving many "big down payments" in the $20,000-$25,000 range. Click here for the full story.

2024 Honda Civic Hybrid Returns to the U.S., Joining CR-V, and Accord

As the automotive world shifts towards electrification, Honda is getting its own plans in order. To that end, it's bringing the 2024 Honda Civic Hybrid back to the U.S. market. The Civic Hybrid hasn't been seen in the U.S. since it was dropped in 2015. Now, it's set to return for the 2024 model year, available in both sedan and hatchback body styles. Honda is treading a well-worn path in which it uses hybrid models as a stepping stone on the way to full electrification. The CR-V Hybrid, and Accord Hybrid have both already joined the U.S. lineup. They're positioned as the top trims of their respective models. Honda plans for the hybrids to eventually rise to make up 50 percent of the sales mix of the Accord, and CR-V, reports The Drive. It's likely that the Civic Hybrid will follow in those footsteps. It's all a part of Honda's push towards selling 100 percent zero-emissions vehicles in North America, a target it hopes to achieve by 2040. The aim is that as hybrid models become a volume seller for the company, it will ease Honda's transition towards zero-emission models, such as full EVs. Click here for the full story.

What Does the Future Hold for The Buy/Sell Market? Ryan Kerrigan Weighs in

Seventy-five percent of the dealers questioned by the latest Kerrigan Dealer Survey anticipate that dealership earnings will remain at their present high levels or reach new highs in 2023. Today on CBT Now, Ryan Kerrigan, Managing Director of Kerrigan Advisors, joins us to update us on mergers and acquisitions in the automotive industry today. For starters, record profits continue to rise. According to Kerrigan, the publics reported yet another set of record earnings through the first three months of 2022. A record profit of $4.7 billion, up 26 percent from 2021, was also achieved. To put things in perspective, that’s exactly three times as much money as the publics made in 2019 before the pandemic. Kerrigan claims, “we observe this on the private side as well.”  Stocks are down for the year. The Kerrigan Index™ significantly declined in 2022 by 33 percent, underperforming the larger markets. However, multiples are now very compressed. The publics are trading between a two and four-times blue sky multiple, which is very low, according to Kerrigan Advisors. On the other hand, the S&P is currently trading at 28 times earnings. Click here for the full story.

VW CEO Doesn’t Think Hydrogen Makes Sense for Passenger Cars

The chief executive of Volkswagen Passenger Cars doesn’t think hydrogen power makes sense for consumer-oriented models, at least not this decade. While many of the world’s largest car manufacturers are transitioning their line-ups to consist of nothing by EVs, there remain a handful that still believe hydrogen has a future, such as BMW, Toyota, and Hyundai, reports Carscoops. “Hydrogen is not for us,” Thomas Schäfer, said when asked his opinion on hydrogen. “No. Hydrogen is pure physics and it’s expensive. It’s not competitive, especially not for passenger cars, whose tanks take up space in the cabin. Maybe for commercial vehicles, but not in the passenger car. So, I don’t see this happening in this decade. Not at Volkswagen.” This isn’t the first time that Volkswagen has scoffed at the idea of using hydrogen powertrains in passenger cars. Three years ago, Volkswagen Passenger Cars technical chief Matthias Rabe also said that fuel-cell technology is not an option for VW. The German car manufacturer wasn’t always so opposed to the idea of hydrogen-powered passenger cars. In 2014, it unveiled both the Passat HyMotion and Golf Estate HyMotion prototypes and once planned on putting them into production. Click here for the full story.

AIADA Affinity Partner Happenings at 2023 NADA Convention

AIADA's Member Benefits Program is one of the most valuable services AIADA provides to its members. AIADA partners with best-in-class companies to provide members with exclusive values on the goods and services they need to succeed in a competitive business environment. While you're in Dallas, make sure to check out AIADA's Affinity Partners. Click here for a quick reference guide on where to find them at NADA 2023!


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Volvo CEO Confirms EX30 Small Electric SUV Debut For This June [Carscoops]

How Much Do Roof Racks Affect Fuel Economy? [Car and Driver]

Top Scientist Outlines Toyota's Measured Approach to EVs [Carbuzz]

Honda Milestone: 30 million Cars Built in the U.S.[Autoblog]