“Democrats unveiled a new EV tax credit proposal tonight with boost for unions. For 5 years, the legislation would implement $7,500 point-of-sale consumer rebates for EV’s & pay out an additional $4,500 for vehicles assembled in a union facility. Another $500 would be awarded for vehicles using a battery manufactured in the U.S. for a potential total of a $12,500 EV credit. Sedans under $55k, SUVs under $69k and pick-up trucks under $74k would be eligible for the credits.”
Do you think Rivian will lower the starting price of the R1S to $69,000 “IF” this “SUV’s under $69k” passes???
Doubt any prices get lowered until current orders are built. Maybe if they are slow a couple of years from now (assuming this credit lasts 5 years) they might adjust price, but don’t see it until then. They can’t produce the orders they got under the current law; why lower Riv’s profit on the first wave of vehicles? We can always hope though!
So, this is different than the proposal for a $10,000 credit but only with a 40k cap (for vehicle purchase price)? In other words, this is different than the infrastructure bill? If anyone is an expert on this kind of stuff, could be great to have them on a q&a sometime. Or perhaps ya’ll have an idea of someone to have on. Holler if so, thx.
shultzy, your information is the original mark up of the infrastructure bill. MrRivianEV’s info is the latest version. It likely won’t make it into the final bill either, but we’ll take it if it does. Tesla’s move to TX, and Rivian “likely” building in Ft. Worth is about gaining political support in oil patch for this type of stuff and tax credits for their charge network build out, etc.
I’m sure Rivian will be on top of it, but if this does become law you will want to be sure your invoice is clear about what you paid for the truck/SUV and what you paid for the camp kitchen and other add ons. Don’t want those things included in your vehicle invoice and have it go over the price limit. This likely would kill the “max pack” battery. Would make it $20,000 more in net acquisition price to go 100 miles more per charge. It already was pricey; now would be a major deal unless Rivian can somehow separate that out too.
Remember, this a tax credit from the Federal Government; not from Rivian. YOU as the buyer has to get the money from Uncle Sam. Shows up as a credit when you file your 1040 for the year purchased. It isn’t hard, but if your R1T gets delivered in February 2022 you won’t get your credit until you file your 2022 income tax return. AND you have to have at least $10,000 in Federal Income Tax due (doesn’t count towards Soc Sec, Medicare etc) to claim the credit. They are not refundable.
Thank you much for the clarification! While I understood the nature of tax credits, haven’t kept up a ton on the proposal. Might need to assign you as our guy to keep our RS community up to date with related news! 😉
It sounds like that is in the latest proposal “to help people with their down payments”. It would be nice, and, it would allow people who own small business to claim the tax credit even if they don’t pay that much in tax. In other words they use other tax strategies to reduce their liability so credit doesn’t do any good. I’m also curious if they will do it by VIN number. So only new vehicles qualify. Once a credit for that VIN is claimed it can’t be issued again.
I wonder if Rivian (and others) will start having a purchase price of a “base” vehicle and then everything else you buy is a separate invoice. That would help avoid the purchase price cap. Especially if expanded battery capabilities are going to run $10,000.
Depending on the final wording and structure ends up I think it would be in Rivian’s best interest to just sell the Rivian with the “Explore” configuration dropping the price to $69k ($1k less). Then make everything an option. Assuming the language is centralized around base MSRP and doesn’t include fees or options, that would be the perfect scenario for Rivian and consumers especially of the R1S. Consumers continue to get a tax credit even while exceeding the cap on a fully optioned “Adventure” package and Rivian keeps potential buyers who were on the fence without the credit. I personally would love to see this happen and have it be a POS rebate versus tax credit.
Reading the language it’s generically MSRP. If you kit out a Ford with options that raises the MSRP. As far as I can tell when reading the actual language, the R1S won’t be eligible if this goes through without significant price changes.
How manufacturers react to the price limitations will be interesting. Things like rim & tire size can easily be changed after market for less than $10,000. So reduce MSRP by getting the standard tire & rim and then swap it out. Something like the battery is a big deal. Doubt that can swapped. Depending on how much margin they built into the existing pricing structure last fall, just dropping the price might not be an option. Certainly won’t be in future years. Raw material costs have skyrocketed since then and Rivian won’t be immune. Since the pre-order book is large I doubt we see any price concessions (we can all hope though). More likely their future vehicles will be eligible and the R1T and R1S won’t be.
Obviously this is at least the third version of the EV credit in this bill. The bill may not pass at all and almost certainly the “union built” $2500 won’t survive. That is an easy cut on legislation that is trying to get smaller. And don’t be stunned if there is a fee for the POS option. Nobody is going to handle all the accounting & money movement with that for nothing (plus be under pressure to drop the vehicle price).