Tax Credit Changes in new bill [LOCKED DUE TO POLITICS & ARGUING]

[sevengroove]

Sorry if this is repeated, but for those who already received or about to receive a Rivian this year, shouldn't be affected at all by this? We can still claim the $7500 tax credit when filing for 2022 tax year? Or is this bill going to affect us? (I'm about to take delivery this week or next)

You should be fine. Watch the video linked in this post above if you get a chance, it clears up a lot of confusion from earlier in the thread re: date of law enactment etc. My understanding is that the current tax credit structure applies for vehicles purchased by the end of 2022.

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[TXR1S]

Vehicle's not in service by December 31, 2022 will be subject to the new law so deposit or pre-payment in full won't be a work around: 9 minute mark.

This is not accurate. Later in the video he talks about the transition period. (11:30). He glosses over it because the transition rule doesn’t help Tesla, since they have no current credit.

The transition rule is a major deal to every manufacturer with current tax credits.

For example, if Rivian let all current customers sign a PBA, the post-March pricing customers could get the existing $7500 tax credit.

Think about the free value to Rivian of basically locking in those orders. (Would be hard to cancel your order if you have a grandfathered $7500 discount on it!) The alternative is some (unknown) cancellation rate if the $7500 tax credit disappears.

I’m curious to see if any of the other manufactures (Polestar, Lucid) basically pre-sell 200,000 cars (or however many credits they have remaining). I know I would in their shoes.

 

[SJ R1S]

This is not accurate. Later in the video he talks about the transition period. (11:30). He glosses over it because the transition rule doesn’t help Tesla, since they have no current credit.

The transition rule is a major deal to every manufacturer with current tax credits.

For example, if Rivian let all current customers sign a PBA, the post-March pricing customers could get the existing $7500 tax credit.

Think about the free value to Rivian of basically locking in those orders. (Would be hard to cancel your order if you have a grandfathered $7500 discount on it!) The alternative is some (unknown) cancellation rate if the $7500 tax credit disappears.

I’m curious to see if any of the other manufactures (Polestar, Lucid) basically pre-sell 200,000 cars (or however many credits they have remaining). I know I would in their shoes.

The way I read the transition rule, any EV purchased after the bill is signed into law (without a binding contract), but before the end of this year will not qualify for either the old credit nor the new one. The date of enactment will be whenever the President signs the bill. The new rule is not effective until January 1, 2023. That leaves a window with no credit.

 

[TXR1S]

The way I read the transition rule, any EV purchased after the bill is signed into law (without a binding contract), but before the end of this year will not qualify for either the old credit nor the new one. The date of enactment will be whenever the President signs the bill. The new rule is not effective until January 1, 2023. That leaves a window with no credit.

Huh, I dont read it that way.
”Except as provided in paragraphs 2,3,4 and 5, the charges made by this section (which removes the old credit and imposes new requirements) apply to vehicles placed in service after 12/31/22”.

(2): Assembly in USA requirement: applies to old credit upon bill signature (date of enactment).

(3): Battery mineral origins and battery assembly component origin requirements: applies to whatever credit is in place upon guidance being issued by Secretary of Treasury

(4): credit refundability: applies starting 2024

(5): removal of 200,000 vehicle cap: applies to vehicles in service after 12/31/22 (this is why there is nothing retroactive for teslas for this year).

so any vehicle in service before end of year qualifies, with the 4 caveats above.

Again, not a tax lawyer (but I did argue a case in front of a Colorado Supreme Court justice in Mock Trial!)

 

[SJ R1S]

Huh, I dont read it that way.
”Except as provided in paragraphs 2,3,4 and 5, the charges made by this section (which removes the old credit and imposes new requirements) apply to vehicles placed in service after 12/31/22”.

(2): Assembly in USA requirement: applies to old credit upon bill signature (date of enactment).

(3): Battery mineral origins and battery assembly component origin requirements: applies to whatever credit is in place upon guidance being issued by Secretary of Treasury

(4): credit refundability: applies starting 2024

(5): removal of 200,000 vehicle cap: applies to vehicles in service after 12/31/22 (this is why there is nothing retroactive for teslas for this year).

so any vehicle in service before end of year qualifies, with the 4 caveats above.

Again, not a tax lawyer (but I did argue a case in front of a Colorado Supreme Court justice in Mock Trial!)

Well that's good news. My Lightning was just built and I was thinking I'd probably lose out on the credit by a few weeks (assuming this bill stays on the fast track and is signed relatively quickly). I was thinking the transition rules were intended to be an attempted anti-abuse provision to prevent people from rushing to buy an EV by the end of the year. If not, I don't really understand the intent behind the transition rule given that people would not normally have a binding contract to purchase a car several months before it being delivered (again assuming the bill is signed sometime in August/September).

 

[rohobono]

(l) TRANSITION RULE.—Solely for purposes of the application of section 30D of the Internal Revenue Code of 1986, in the case of a taxpayer that— (1) after December 31, 2021, and before the
date of enactment of this Act, purchased, or entered into a written binding contract to purchase, a new qualified plug-in electric drive motor vehicle (as de2 fined in section 30D(d)(1) of the Internal Revenue Code of 1986, as in effect on the day before the date of enactment of this Act), and (2) placed such vehicle in service on or after the date of enactment of this Act, such taxpayer may elect (at such time, and in such form and manner, as the Secretary of the Treasury, or the Sec9 retary’s delegate, may prescribe) to treat such vehicle as having been placed in service on the day before the date of enactment of this Act.

Huh, I dont read it that way.

Yeah me either. Specifically for the transition rule, I read it as: If during 2022 you purchase, or enter into a binding contract to purchase a qualifying vehicle under the previous tax-credits definition(so no Tesla or GM) BUT before the revisions are signed into law AND it wasn't delivered(put into service) until after the revisions are signed into law. You can choose which version of the credit you want to apply.

So I think if you sign a binding purchase agreement before the new revisions are signed into law but don't take delivery until after the revisions are signed in, you can still apply the old credit under the old requirements(so no price cap or battery material restrictions). Unfortunately since the PBA's seem to be non binding, I don't think they would qualify.

 

[TXR1S]

Unfortunately since the PBA's seem to be non binding, I don't think they would qualify.

Ok, interesting- didn’t know they were non binding.

Time for a revision to make them binding with a TEN (!!) dollar penalty if either party breaches the agreement.

 

[rohobono]

Ok, interesting- didn’t know they were non binding.

Yeah, I'm not 100% on that, but I remember seeing it stated both here and on reddit.

 

[tren01t]

Huh, I dont read it that way.
”Except as provided in paragraphs 2,3,4 and 5, the charges made by this section (which removes the old credit and imposes new requirements) apply to vehicles placed in service after 12/31/22”.

(2): Assembly in USA requirement: applies to old credit upon bill signature (date of enactment).

(3): Battery mineral origins and battery assembly component origin requirements: applies to whatever credit is in place upon guidance being issued by Secretary of Treasury

(4): credit refundability: applies starting 2024

(5): removal of 200,000 vehicle cap: applies to vehicles in service after 12/31/22 (this is why there is nothing retroactive for teslas for this year).

so any vehicle in service before end of year qualifies, with the 4 caveats above.

Again, not a tax lawyer (but I did argue a case in front of a Colorado Supreme Court justice in Mock Trial!)

Ah yes moot court, I have not so fond memories doing those in preparation of expert testimony in forensic alcohol lol

 

[Friscorays]

This is not accurate. Later in the video he talks about the transition period. (11:30). He glosses over it because the transition rule doesn’t help Tesla, since they have no current credit....

Sure enough, I completely missed that. There is hope yet. Thank you for pointing that out.

 

[Acoustic71]

Yeah, I'm not 100% on that, but I remember seeing it stated both here and on reddit.

Well, if it's on Reddit....

 

[SASSquatch]

$5K markup included?

If you are paying 5K markup on a Chevy Bolt I have a bridge to sell you!

 

[Zybane]

So my R1S build right now is $83,625. You guys think it would be wise for me to remove ~$4K worth of stuff, say my Forest Edge interior and All terrain wheels/tires to get me under $80K? If not, those ~$4K worth of options would end up costing me almost $12K by losing the tax credit?

 

[R1Sky Business]

If you are paying 5K markup on a Chevy Bolt I have a bridge to sell you!

Is it special edition, Rivian branded?

 

[R1Sky Business]

So my R1S build right now is $83,625. You guys think it would be wise for me to remove ~$4K worth of stuff, say my Forest Edge interior and All terrain wheels/tires to get me under $80K? If not, those ~$4K worth of options would end up costing me almost $12K by losing the tax credit?

Easy now, there's nothing settled yet.

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