Latest EV tax credit status (as of 12/30/22) - summary by NYT

[markp]

"Auto industry lobbyists want the administration to interpret that provision to mean that cars purchased by leasing companies are commercial vehicles.
If that argument flies, and the Treasury Department indicated Thursday that it will, rental companies, ride-share services and leasing companies could collect credits on imported vehicles or those with foreign parts and pass the savings on to their customers."

Since Rivian and other EV companies were responsive to customer requests for entering into BPAs before Aug 16, maybe there's a chance they will take advantage of this new loophole to lease the new vehicle, take the credit, then immediate allow the customer to purchase out the lease (and passing the credit to the customer of course)?

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[SANZC02]

Since Rivian and other EV companies were responsive to customer requests for entering into BPAs before Aug 16, maybe there's a chance they will take advantage of this new loophole to lease the new vehicle, take the credit, then immediate allow the customer to purchase out the lease (and passing the credit to the customer of course)?

Based on my experience shopping for Solar, that does not reach the customers pocket. It was much cheaper for me to purchase Solar and claim the tax credit than go with a lease option.

 

[photontorque]

Assuming this article is accurate, effective today the MSRP cap and income cap provisions are in effect. Only the battery sourcing test has been delayed through sometime in March.

“As reported by Reuters, the US Treasury Department has delayed its battery guidance for qualifying EV tax credits until sometime in March. Still, requirements like North American assembly of the EV as well as caps on MSRP and annual salary will still go into effect on January 1 as planned.”

Full article: https://electrek.co/2022/12/19/us-treasury-delays-ev-battery-guidance-qualify-for-2023-tax-credits/

The graphic / flow-chart in the article is pretty helpful. Importantly -- assuming it is correct -- the graphic includes the statement "at or below $80k" still qualifies for the credit. Turns out I'm at $80500 . . . including the $500 wall charger. So if I can order that separately, or if it's not included in the vehicle cost since it's not actually part of the vehicle, then my R1S order is exactly $80k, and the "at" part of the "at or below $80k" means I can still qualify. Evidently I have skin on my teeth, but not after this transaction.

@RexRemus - I don't know the answer to your question, but since the PBA is between Rivian and a signed individual, my guess would be whose ever name is on the PBA is the name that counts. But I really don't know.

 

[RexRemus]

The graphic / flow-chart in the article is pretty helpful. Importantly -- assuming it is correct -- the graphic includes the statement "at or below $80k" still qualifies for the credit. Turns out I'm at $80500 . . . including the $500 wall charger. So if I can order that separately, or if it's not included in the vehicle cost since it's not actually part of the vehicle, then my R1S order is exactly $80k, and the "at" part of the "at or below $80k" means I can still qualify. Evidently I have skin on my teeth, but not after this transaction.

@RexRemus - I don't know the answer to your question, but since the PBA is between Rivian and a signed individual, my guess would be whose ever name is on the PBA is the name that counts. But I really don't know.

Was thinking in the case the PBA is effectively null and void - I realize it might be too late for that, and it's already been signed but if it's not actually going to provide any benefit, and say (thought experiment) Rivian can "void" it. Then the question is - did we reserve a spot in line for a vehicle to be purchased (by anyone) or did we reserve a spot for only a specific person. It's been made very clear you did NOT reserve, pricing, accessories, etc -as those have already, and continue to be changed by Rivian, you have the "option" to purchase when your spot in line comes up - that's it.
So as long as Rivian is getting revenue for the vehicle, what difference does it make WHO actually signs the title and provides funds? Maybe I'll try asking CS but I wouldn't trust their answers much (not out of bad faith, I just suspect it's not something they'd know or would only be guessing at), more curious if anyone else has tried/done it.

 

[Jac]

Was thinking in the case the PBA is effectively null and void - I realize it might be too late for that, and it's already been signed but if it's not actually going to provide any benefit, and say (thought experiment) Rivian can "void" it. Then the question is - did we reserve a spot in line for a vehicle to be purchased (by anyone) or did we reserve a spot for only a specific person. It's been made very clear you did NOT reserve, pricing, accessories, etc -as those have already, and continue to be changed by Rivian, you have the "option" to purchase when your spot in line comes up - that's it.
So as long as Rivian is getting revenue for the vehicle, what difference does it make WHO actually signs the title and provides funds? Maybe I'll try asking CS but I wouldn't trust their answers much (not out of bad faith, I just suspect it's not something they'd know or would only be guessing at), more curious if anyone else has tried/done it.

My recollection is well before the Inflation Reduction Act was even an issue, Rivian had tightened up its rules about transferring preorders in an effort to end transfers. In general, I believe your choice is to buy it yourself or get a refund. Call them and ask about their policy on transferring preorders. Others have posted about the risk of losing any federal EV tax credit you might have been entitled to if you do buy it with the intent of reselling it. Other than that, you are free to buy and resell.

 

[Grabs10]

Couldn’t Rivian say on $90k msrp vehicle do a 1 month lease with option to buy after a month…. Like a $0 down lease of this 90k vehicle and have a balloon/buyout payment of 82,500 after a month. Lease collects the tax credit and is able to pass it onto its customers when they buy the vehicle out at the end of the lease term.

 

[Jac]

Couldn’t Rivian say on $90k msrp vehicle do a 1 month lease with option to buy after a month…. Like a $0 down lease of this 90k vehicle and have a balloon/buyout payment of 82,500 after a month. Lease collects the tax credit and is able to pass it onto its customers when they buy the vehicle out at the end of the lease term.

So, the customer of the leasing company would be locked Into a very attractive and unusual lease contract and the leasing company would assume the risk that the the tax credit the leasing company hoped to receive is ultimately disallowed? Seems like the leasing company‘s executives might want to have a favorable private letter ruling or other guidance from the IRS before they’d offer such a lease. Just my initial thought.

 

[Grabs10]

So, the customer of the leasing company would be locked Into a very attractive and unusual lease contract and the leasing company would assume the risk that the the tax credit the leasing company hoped to receive is ultimately disallowed? Seems like the leasing company‘s executives might want to have a favorable private letter ruling or other guidance from the IRS before they’d offer such a lease. Just my initial thought.

I would say with time that will be clarified but it appears on the leasing side it is the exact same as the last EV program which allowed many to take advantage of the credit through leasing that wouldn’t have been allowed if they were buying. But with income limits, and the credit being nonrefundable I think these dealers and companies need to be careful especially with the majority having no federal income tax obligations. Somebody walks in to buy a Chevy bolt and expects a 7500 discount and the dealer gives it thinking they will get the tax credit and come to find out after the fact the purchaser didn’t have enough income to cover enough income tax obligation the dealer gave as a credit. To achieve $7500 in federal income tax obligation, you are pretty well off in the US

 

[emoore]

The graphic / flow-chart in the article is pretty helpful. Importantly -- assuming it is correct -- the graphic includes the statement "at or below $80k" still qualifies for the credit. Turns out I'm at $80500 . . . including the $500 wall charger. So if I can order that separately, or if it's not included in the vehicle cost since it's not actually part of the vehicle, then my R1S order is exactly $80k, and the "at" part of the "at or below $80k" means I can still qualify. Evidently I have skin on my teeth, but not after this transaction.

@RexRemus - I don't know the answer to your question, but since the PBA is between Rivian and a signed individual, my guess would be whose ever name is on the PBA is the name that counts. But I really don't know.

My window sticker didn’t have the charger or the manual tonneau cover listed.

 

[brancky3]

My window sticker didn’t have the charger or the manual tonneau cover listed.

I confirm, my sticker doesn't have the tonneau added.

 

[RexRemus]

My recollection is well before the Inflation Reduction Act was even an issue, Rivian had tightened up its rules about transferring preorders in an effort to end transfers. In general, I believe your choice is to buy it yourself or get a refund. Call them and ask about their policy on transferring preorders. Others have posted about the risk of losing any federal EV tax credit you might have been entitled to if you do buy it with the intent of reselling it. Other than that, you are free to buy and resell.

Thanks for the info. Yeah I'll probably check in with CS. The idea (in my case) would be to let her hold the title for a year (or however long for the taxes to be settled), get the credit/refund and then worry about transferring ownership. So not a quick flip

 

[photontorque]

My window sticker didn’t have the charger or the manual tonneau cover listed.

I confirm, my sticker doesn't have the tonneau added.

Great news to start 2023, thanks! Now I just need that R1S to show up before March.

 

[norivian]

I’m not sure we’ll know whether the IRS accepts signed Rivian binding purchase agreements as a result of return filings any time soon. Since Rivians are assembled in the U.S., the new credit rules seem to only affect Rivians delivered beginning in 2023. Claiming a tax credit on a 2022 tax year return for a 2023 vehicle purchase transaction is very questionable, so more likely to need to wait longer for clarity.

Was gonna ask about this. Thanks for bringing this up. Guess not specifically addressed on the IRS guidelines.

 

[gordonrands]

This is just outright ridiculous and in line with some of the other things I've seen on this sub and it just absolutely baffles me.

"If you can/can't afford X, then maybe you shouldn't be buying this car."

Not everyone who is buying this car sees 80K as a drop in a bucket. I'm single, upper middle class, and have a pretty good job, but by no means am I well off enough to just say almost 10% of my vehicle purchase is worth forgetting about because it's above a certain price point. That's absolutely bonkers to me.

Agreed, not everyone who is buying an EV can easily afford it. I am married with an income closer to $100K than $150K, turning 70 and am delaying retirement for two years in order to afford an EV truck so we can travel without further adding fossil fuel pollution to our grandchildrens' world.

While I understand and generally support the reasoning behind the income, assembly and sourcing components for the EV credit of the Inflation Reduction Act, putting the requirements in place immediately was a mistake, as it threatens to significantly slow the rate of EV adoption for a couple of years. Far better that they had either taken effect in 2025, or that the amounts had started lower and ramped up over time in order to give manufacturers time to make needed contracts and build plants to meet them.

It would seem that Rivian is probably the most negatively affected by the requirements. I hope that RJ is lobbying hard for some changes. The Normal plant is located in one of the few Illinois Congressional districts with a Republican representative, so maybe there is a slight hope for some bipartisan support.

 

[Jac]

Agreed, not everyone who is buying an EV can easily afford it. I am married with an income closer to $100K than $150K, turning 70 and am delaying retirement for two years in order to afford an EV truck so we can travel without further adding fossil fuel pollution to our grandchildrens' world.

While I understand and generally support the reasoning behind the income, assembly and sourcing components for the EV credit of the Inflation Reduction Act, putting the requirements in place immediately was a mistake, as it threatens to significantly slow the rate of EV adoption for a couple of years. Far better that they had either taken effect in 2025, or that the amounts had started lower and ramped up over time in order to give manufacturers time to make needed contracts and build plants to meet them.

It would seem that Rivian is probably the most negatively affected by the requirements. I hope that RJ is lobbying hard for some changes. The Normal plant is located in one of the few Illinois Congressional districts with a Republican representative, so maybe there is a slight hope for some bipartisan support.

“… so maybe there is a slight hope for some bipartisan support.” I‘d put the odds of something like this passing this Congress at close to zero. Regrettably.

E.g., https://www.ernst.senate.gov/news/p...ubsidies-incentives-for-child-and-slave-labor

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