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

[SASSquatch]

We could go around and around on the definition of "similarly equipped" but you shared a truck that is significantly slower and less capable off-road. Of course, it beats the Rivian in many other areas but I'm most attracted to the R1T/R1S for the speed and off-road capability, and I think many others are too. You may not see the value prop there, but others do and you'll be leaving money on the table if you don't at least buy and flip the R1T, even without the tax credit.

You are citing speed and off-road capability but that has to do with electrification and I am giving that up if I give up the credit.

Most of us are not going to be doing the kinds of offroading that the R1T would allow for if we are being realistic. Also, the King Ranch F-150 has a hybrid boost engine so it is efficient, and electrified so you get that nice torque off the line.

Ford is an established brand, with an established reliability and quality. I have owned many Ford vehicles and have been happy with them.

RIVIAN is new, with no established long term reliability or quality, and a lot of question marks in terms of service, and overall customer experience and satisfaction.

A new car company is already starting out at a significant disadvantage over established brands. Then you throw in the extra costs associated with getting to scale, AND the high cost of batteries and materials, and they have to charge a price premium most people aren't going to be able to afford over existing options.

That is why the $7,500 credit is so critical when you are dealing with a new EV manufacturer and why the income cap, and price cap, is so stupid and unnecessary.

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[mabowden]

I will challenge you on this.

My R1T reservation is NOT an $80K vehicle. My configuration is much less than that and WITH the tax incentive, which was in play when I made my reservation, I was looking at this as a $67K vehicle which puts it in line with a range of trucks and SUVS that would offer similar kinds of features/capabilities (minus the electrification).

By denying RIVIAN the same 200,000 EV credits that were afforded to all previous manufacturers, including GM, Ford, Nissan, and Telsa, Congress is disadvantaging them, and every new EV manufacturer, because RIVIAN can't use that tax credit to incentivize sales and help overcome the high costs of mass production, especially in this inflationary market.

Everyone who placed a pre-March 1 reservation did so with the expectation that they would offset the price of the vehicle by $7,500. I would not receive that based on my income cap and if RIVIAN doesn't find a way around that if the measure passes, I will not be purchasing the R1T - I simply can't justify it over a comparatively equipped vehicle from a manufacturer (ICE) who has reduced cost because of scale.

In high cost of living states, $300K of income can mean living paycheck to paycheck and I cannot afford to pay a $7,500 penalty for purchasing an R1T.

That hurts me. That hurts RIVIAN, and that hurts the goal of reducing the number of ICE vehicles on the road and increasing the number of EVs.

I'm in a similar boat. I would still buy the truck, but would be much less happy to do so. By the sounds of it, Rivian will not qualify for 3750 even if you meet the income and price cap. I do meet the household income cap so I'm changing spec to try to get a truck this year. I was already dec-jan with OC interior, so I'm finally making the switch to BM. I don't like Rivian blue as much without OC, so i'm going limestone/bm. OC would have been worth the wait for me, but not for $3750. I also did everything else to get the truck: auto tonneau, 21s, no underbody. We'll see if that helps me hit the rivian lottery.

 

[astonius]

If this bill is going to pass I hope the proposed compromise is included. Let current manufacturers who haven’t exhausted their 200k credits continue to get those, unbounded by the price, income, and battery requirements. Once they hit the 200k they can use the new credit.

 

[SASSquatch]

What everyone needs to realize is that the price cap and the income cap of $150K/$300K was not decided on because it made any real sense.

AMEN!

• Let's put the $150K income cap in perspective. Let's say, hypothetically, you are single and making $150K in DC. You must be a high roller right? You don't need no stupid $7,500 credit.

Well, let's break that down. According to average calculator sites that salary comes to a net paycheck of $5.5K a month.

• The AVERAGE cost of an apartment in DC is $2,335 a month. Let's assume average. That leaves you with $3165
• Utilities, including electric, gas, cable, telephone, internet, etc. are going to run you 500-600 IF you are living efficiently. That leaves you $2,565 per month.
• You have to eat. Groceries are EXPENSIVE. Let's say you are frugal and spend $300 a month by clipping coupons. That leaves you $2,265 a month.
• You are going to have entertainment expenses like going to the movies, out with friends, eating out occasionally. Let's say you are sticking to a budget and only spend $150 a month. That leaves you with $2,115
• Owning a vehicle, even if you aren't paying for gasoline, requires expenses like paying for parking (especially in DC) and insurance (which can be expensive). Let's say all that adds up to $200 a month which is probably being very conservative. That leaves you with $1,915.
• I am sure I am missing some expenses here.
• Anyone want to do the math and tell me what a car payment for a pre-MARCH 1 priced R1T WITHOUT factoring in the $7,500 tax credit would be per month?
• I am willing to bet money that it will be hard afford that car payment on a salary of $150,000 living in DC.

The $150K/$300K income cap is stupid and only there because of Joe Manchin whose constituency is living on closer to the average salary in the US of $65K. If I lived in WV, I would be living like a King on that salary, but not everyone can live in WV.

EDIT: Grabbed the wrong numbers.

 

[emoore]

What everyone needs to realize is that the price cap and the income cap of $150K/$300K was not decided on because it made any real sense.

• Let's put the $150K income cap in perspective. Let's say, hypothetically, you are single and making $150K in DC. You must be a high roller right? You don't need no stupid $7,500 credit.

Well, let's break that down. According to this site that salary comes to a net paycheck of $4,129 a month.

• The AVERAGE cost of an apartment in DC is $2,335 a month. Let's assume average. That leaves you with $1794.
• Utilities, including electric, gas, cable, telephone, internet, etc. are going to run you 500-600 IF you are living efficiently. That leaves you $1,194 per month.
• You have to eat. Groceries are EXPENSIVE. Let's say you are frugal and spend $300 a month by clipping coupons. That leaves you $894 a month.
• You are going to have entertainment expenses like going to the movies, out with friends, eating out occasionally. Let's say you are sticking to a budget and only spend $150 a month. That leaves you with $744.
• Owning a vehicle, even if you aren't paying for gasoline, requires expenses like paying for parking (especially in DC) and insurance (which can be expensive). Let's say all that adds up to $200 a month which is probably being very conservative. That leaves you with $544.
• Anyone want to do the math and tell me what a car payment for a pre-MARCH 1 priced R1T WITHOUT factoring in the $7,500 tax credit would be per month?
• I am willing to bet money that you can't afford that car payment on a salary of $150,000 living in DC.
• Guess you are living large as a high roller....

The $150K/$300K income cap is stupid and only there because of Joe Manchin whose constituency is living on closer to the average salary in the US of $65K. If I lived in WV, I would be living like a King on that salary, but not everyone can live in WV.

It’s not 4192 a month. It’s semi monthly so 8384 a month. Makes the budget much easier.

 

[SASSquatch]

It’s not 4192 a month. It’s semi monthly so 8384 a month. Makes the budget much easier.

So...OOOPS. Thanks for catching that. Except, I didn't configure other deductions manually so the $4K is underestimating total deductions and taxes. It also doesn't include health insurance, etc. I make over the $150K I put in the configurator, I don't see anywhere NEAR 8K per paycheck monthly.

But, to your point, it is likely more than 4K but probably close to 5.5K (otherwise me and uncle sam are going to have problems).

Even at 5.5K that is still some exceedingly tight math. Tight to the point that you can't dismiss $7,500.

 

[Donald Stanfield]

We could go around and around on the definition of "similarly equipped" but you shared a truck that is significantly slower and less capable off-road. Of course, it beats the Rivian in many other areas but I'm most attracted to the R1T/R1S for the speed and off-road capability, and I think many others are too. You may not see the value prop there, but others do and you'll be leaving money on the table if you don't at least buy and flip the R1T, even without the tax credit.

At the end of the day yes the Rivian is much better equipped for the money, no one is arguing that. What people are saying is that if you NEED a truck for whatever reason be it towing or payload or off-roading with the tax credit the Rivian becomes a 60 something thousand dollar truck which puts it of the same value as many other pickups. If the tax credit is lost it's no longer in the same price category and people who are stretching the top of their budget won't be able to justify that premium price over something else that satisfies their needs well enough.

 

[emoore]

So...OOOPS. Thanks for catching that. Except, I didn't configure other deductions manually so the $4K is underestimating total deductions and taxes. It also doesn't include health insurance, etc. I make over the $150K I put in the configurator, I don't see anywhere NEAR 8K per paycheck monthly.

But, to your point, it is likely more than 4K but probably close to 5.5K (otherwise me and uncle sam are going to have problems).

Even at 5.5K that is still some exceedingly tight math. Tight to the point that you can't dismiss $7,500.

I don’t agree that it’s closer to 5.5k. I dont see how you make over 150k and take home less than 8k monthly. Don’t forget there are effectively 13 pay months in a year if you get paid weekly.

8k a month is nearly 100k a year take home. There a a lot of deductions if you can’t take 100k home with over 150k salary.

I do still think it would be tight budget wise if you have to finance more than 40-50k.

 

[Donald Stanfield]

What everyone needs to realize is that the price cap and the income cap of $150K/$300K was not decided on because it made any real sense.

• Let's put the $150K income cap in perspective. Let's say, hypothetically, you are single and making $150K in DC. You must be a high roller right? You don't need no stupid $7,500 credit.

Well, let's break that down. According to this site that salary comes to a net paycheck of $4,129 a month.

• The AVERAGE cost of an apartment in DC is $2,335 a month. Let's assume average. That leaves you with $1794.
• Utilities, including electric, gas, cable, telephone, internet, etc. are going to run you 500-600 IF you are living efficiently. That leaves you $1,194 per month.
• You have to eat. Groceries are EXPENSIVE. Let's say you are frugal and spend $300 a month by clipping coupons. That leaves you $894 a month.
• You are going to have entertainment expenses like going to the movies, out with friends, eating out occasionally. Let's say you are sticking to a budget and only spend $150 a month. That leaves you with $744.
• Owning a vehicle, even if you aren't paying for gasoline, requires expenses like paying for parking (especially in DC) and insurance (which can be expensive). Let's say all that adds up to $200 a month which is probably being very conservative. That leaves you with $544.
• Anyone want to do the math and tell me what a car payment for a pre-MARCH 1 priced R1T WITHOUT factoring in the $7,500 tax credit would be per month?
• I am willing to bet money that you can't afford that car payment on a salary of $150,000 living in DC.
• Guess you are living large as a high roller....

The $150K/$300K income cap is stupid and only there because of Joe Manchin whose constituency is living on closer to the average salary in the US of $65K. If I lived in WV, I would be living like a King on that salary, but not everyone can live in WV.

So...OOOPS. Thanks for catching that. Except, I didn't configure other deductions manually so the $4K is underestimating total deductions and taxes. It also doesn't include health insurance, etc. I make over the $150K I put in the configurator, I don't see anywhere NEAR 8K per paycheck monthly.

But, to your point, it is likely more than 4K but probably close to 5.5K (otherwise me and uncle sam are going to have problems).

Even at 5.5K that is still some exceedingly tight math. Tight to the point that you can't dismiss $7,500.

Yeah your numbers also don't consider putting away for retirement. Unless you want to work until you drop dead you're going to need some long term investments to maintain your standard of living. It would be a shame to make what is a decent living and retire eating cat food because you didn't put any money away.

Personally I make over the cap to a great enough degree that credit or not I'm most likely buying the truck because I can justify the extra cost. It still sucks and I still want the 7,500 but many more people are going to be affected the way you are vs the way I am. People really tend to overestimate the lifestyle you can attain on 300K or there about a year. Sure you're going to have some nicer stuff, but not what people would consider visibly wealthy. You aren't crashing Lamborghinis every other week or staying in Monte Carlo half the year.

 

[Donald Stanfield]

I don’t agree that it’s closer to 5.5k. I dont see how you make over 150k and take home less than 8k monthly. Don’t forget there are effectively 13 pay months in a year if you get paid weekly.

8k a month is nearly 100k a year take home. There a a lot of deductions if you can’t take 100k home with over 150k salary.

What state and federal tax rates are you factoring that on? It really depends on how you get the 150K, if you're a W-2 employee you're going to get hit harder than 50 between state and federal.

 

[Gamma rays]

Here is the response I just received from Rivian. It is definitely not what I was looking for and hope Rivian will be willing to work with their customers some once the legislation presumably passes.

"We have seen this request from community members for the very same reason, it's definitely understandable. However, we are not providing such an opportunity at this time. Written and binding contracts are in the form of your purchase agreement and since you have not entered the purchase process, we are unable to fulfill your request."

That's a disappointing response. I have read on another EV forum that Fisker is working on a plan to sign as many binding agreements as people are willing if this bill ends up passing. I hope Rivian would at least look into this option.

I wonder if Rivian prefers, to a certain extent, that some pre-March orders get canceled as a result of this.

GR

 

[freshpow]

At the end of the day yes the Rivian is much better equipped for the money, no one is arguing that. What people are saying is that if you NEED a truck for whatever reason be it towing or payload or off-roading with the tax credit the Rivian becomes a 60 something thousand dollar truck which puts it of the same value as many other pickups. If the tax credit is lost it's no longer in the same price category and people who are stretching the top of their budget won't be able to justify that premium price over something else that satisfies their needs well enough.

Right, and my point is the “well if I don’t get the tax credit I’m not going to buy the R1T” is a silly about turn, especially if you’ve been waiting for years. Buy it, flip it for $20k profit and do what you see fit with the proceeds. People who are stretching their budgets should be particularly interested in that money.

 

[emoore]

What state and federal tax rates are you factoring that on? It really depends on how you get the 150K, if you're a W-2 employee you're going to get hit harder than 50 between state and federal.

I can agree with that but it’s still no where near 5.5k a month (66k year). That’s almost 100k in deductions.

 

[Donald Stanfield]

Right, and my point is the “well if I don’t get the tax credit I’m not going to buy the R1T” is a silly about turn, especially if you’ve been waiting for years. Buy it, flip it for $20k profit and do what you see fit with the proceeds. People who are stretching their budgets should be particularly interested in that money.

Yeah that is a good point and if money is tight flipping it to someone who is willing to pay you extra simply because of the pricing is an even better move than simply buying a cheaper truck. You can still end up with the cheaper truck but 15K or more off the purchase price of that from flipping the Rivian. I did tell myself that if I don't like the truck flipping it is what I was prepared to do. I'm really planning on liking it though personally as it seems to fit my needs to a T.

 

[Donald Stanfield]

I can agree with that but it’s still no where near 5.5k a month (66k year). That’s almost 100k in deductions.

It's hard to say. I've never made that amount of income on a W-2 most of my income comes through a K1 and that's different rules so I can't definitively say one way or the other.

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