Is the current design of used-EV tax incentives actually delivering emissions reductions and affordability, or just inflating prices and rewarding intermediaries?
A few concerns and questions I haven’t seen tackled head-on:
Price pass-through vs. buyer benefit: Since the point-of-sale transfer started, are dealers capturing most of the used-EV credit in higher asking prices? Has anyone tracked the same VINs or trims across months to see if list prices jumped by roughly the credit amount? Any data from auction lanes or dealer groups on margin changes?
Dealer-only eligibility and equity: Requiring a dealer purchase excludes the most price-sensitive buyers who shop private-party. If the goal is decarbonization and access, why block peer-to-peer? Is there a workable model for a portable credit (escrow, DMV validation, or title-based certification) that doesn’t rely on a dealer?
Battery health blind spot: Subsidizing cars with severely degraded packs seems counterproductive. Should eligibility hinge on an independently verifiable battery state-of-health floor (say, ≥80% usable capacity), with the credit scaled to SOH? What’s the fairest and least gameable way to measure SOH across brands without creating a repairability nightmare?
Lifetime double-dipping: The same VIN can collect a new-vehicle subsidy and later a used-vehicle subsidy. Should there be a lifetime per-VIN cap tied to estimated lifetime CO2 abatement, or a structure that shifts more support to battery refurb/replacement rather than repeated transactions?
VMT and grid intensity targeting: A used EV displacing 20k ICE miles/year in a coal-heavy grid isn’t the same as one doing 3k miles/year on a clean grid. Should incentives be usage-based (odometer-verified, opt-in telematics, or utility-run “pay-for-performance” tied to kWh charged during cleaner grid windows) rather than a one-time tax event?
Threshold gaming: With a hard price cap, I’m seeing a lot of suspicious clustering just under the cap. Anyone got histograms of advertised prices for eligible vs. ineligible trims to quantify bunching? If we’re predictably inducing this behavior, is a sliding credit better than a hard cliff?
Flipping and enforcement: The “once-every-few-years per buyer” restriction doesn’t stop a quick resell. Are dealers or agencies actually detecting and discouraging flip arbitrage, or is the market just baking it in? Any firsthand stories?
State stacking and inventory distortion: In states that stack additional rebates, are we just pulling used EV inventory across borders to chase subsidies, leaving other regions dry and pushing prices up locally?
Salvage/repaired vehicles: Excluding them removes lower-cost pathways for capable buyers. Is there a safe middle ground where repaired EVs with certified inspections and SOH verifications qualify for a reduced or conditional incentive?
What I’d like to see from the community:
- Real transaction data: price changes pre/post incentive changes, dealer doc fees before vs. after, auction wholesale-to-retail spreads.
- Battery SOH reports at sale (BMS readouts, third-party diagnostics) and how they correlate with pricing and buyer satisfaction.
- Policy alternatives you’d actually support, e.g.:
- A portable credit usable in private-party sales with simple title/DMV validation.
- An SOH-weighted credit, with a kicker for verified battery refurb or OEM-certified replacements.
- A usage-based, utility-administered incentive that pays over time for verified ICE displacement or off-peak, low-carbon charging.
- A per-VIN lifetime subsidy cap to avoid repeat payouts with diminishing returns.
If the goal is maximum CO2 reduction per dollar and broader access, I’m not convinced the current dealer-gated, one-time tax credit structure is the right tool. Who’s got evidence that it is-or a better blueprint we can rally behind?