EV Credit Cliffs Notes, Big Companies Investing Big, Is the Nordstrom Tire Story True?

August 4, 2022
As we cruise into the back half of the week we’re giving you a breakdown of the proposed EV Tax Credit. We also talk about why capital investments from big companies are a good sign for the economy. Finally, we’re getting to the bottom of whether or not that legendary tire return story at Nordstrom’s is true or not.
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Breaking down the EV Tax Credit Proposal currently in the Senate

  • Currently: $7500 credit for the first 200k units per OEM
  • Proposed: $7500 credit for unlimited units with sourcing, sticker,  and income stipulations
  • Sourcing:
  • 50 percent of the critical minerals used in EV batteries to be extracted or processed in the U.S. or a country with a free trade agreement in effect, or from materials that were recycled in North America. In 2024 and 2025, 60 percent of the battery components must be made or assembled in North America.
  • Increase to 80 percent after 2026 for critical minerals, and by 2029 would require 100 percent of the battery components to be made or assembled in North America.
  • Final assembly of the vehicle also must occur within North America — a provision that would apply immediately after the bill is enacted.
  • Credit Caps - Sticker: MSRP cap at $80k for new pickups, SUVs and vans, and $55k for other vehicles such as sedans
  • Credit Caps - Income: Adjusted gross incomes cap at $300,000 for joint filers, $225,000 for a head of household and $150,000 for single filers.
  • $4,000 tax credit for consumers buying certain used EVs and a credit for certain commercial vehicles

GM, Google, Pepsi and others are boosting capital investments, signaling confidence

  • Based on results from roughly two-thirds of the companies in the index, capital expenditures have risen 20% from a year earlier to $149.8 billion
  • GM CFO Paul Jacobson talked about expanding its electric-vehicle fleet. “The investments we have made in these vehicles over the last couple of years…provide a strong bridge to our all-electric future as spending rose from 1.5 to 2.1B YoY
  • Alphabet investing in servers and tech infrastructure: “With an uncertain global economic outlook, our strategy to invest in deep technology and computer science to build helpful products for the long term is the right one,” Chief Executive Sundar Pichai said on the company’s earnings call
  • PepsiCo finance chief Hugh Johnston pointed to digital investments to ensure stores are stocked with appropriate inventory

That infamous story about the Nordstrom tire return is…true

  • President Pete Nordstrom recently hosted an episode of “The Nordy Pod” interviewed with Craig Trounce, the sales associate behind the stor
  • Mr. Trounce called a local Firestone dealer to try and gauge the value ($25) of the tires that Sam was returning without a receipt. Sam got his refund.
  • Mr Trounce is currently Manager of the Phoenix contact centers, guest care services for Alaska Airlines

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