Despite the fact that most of its vehicles don't quite qualify for Inflation Reduction Act incentives.
Rivian is helping customers who ordered an R1T or R1S claim their $7,500 tax credit, even though neither vehicle qualifies under the new regulations as set out in the Inflation Reduction Act (IRA).
After President Biden signed it, manufacturers had from August until 31 December 2022 to figure out how to get around it. Even though the government has yet to publish the final EV tax credit guidelines, incentives for certain manufacturers went out the window as soon as the ball dropped on New Year's Eve.
The best solution various automakers could come up with was to have their clients sign a binding agreement before 2023. Yet the latest news on Rivian's website states that only customers who entered a binding order agreement before August 16, 2022, may qualify for a federal tax credit, and only if the government is feeling generous.
To enter a binding agreement, all Rivian required was a $100 non-refundable deposit, which leads us to the Internal Revenue Service's (IRS) generosity.
The IRS and Rivian have differing opinions on what a binding agreement is. For Rivian, it's $100. According to the IRS's website, the indication of a binding contract is a "significant non-refundable deposit or down payment." The word "significant" is extremely hazy, and we doubt the IRS will see $100 as such if a customer ordered a $70,000 plus vehicle. Still, it's worth a try.
Before the IRA was signed into law, a tax credit was given for every EV sold until a manufacturer hit 200,000 units. The new tax credit has stricter restrictions based on where a car is built, where the battery components and raw materials come from, and household income.
The cap for SUVs and pickups is set at $80,000, which means only the entry-level R1T with a standard battery pack (260-mile range) can qualify. Upgrading to the Large pack and adding the destination fee takes the electric truck above the threshold. A base R1S with the Standard pack and no options (not even metallic paint) just slips in under the figure at $79,800, destination included.
The Standard pack's range rules the Rivian out as a contender because 260 miles is not good enough, and the Large pack's 328-mile range is more acceptable. The Max pack is what most people want, but it has been delayed several times.
In addition to making the European Union sweat, the IRA also put startups like Rivian and Lucid in a challenging position. Under the old rules, it could have given customers a decent tax credit until it built 200,000 vehicles. That's a milestone Tesla passed many years ago. Under the new legislation, several of Tesla's models qualify again, but Rivian and Lucid are left out in the cold.
It's nice of Rivian to provide its customers with clear information and links to all the correct paperwork, but whether it will work remains to be seen.
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