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

[eggpaul]

if you got your truck already you’re good to go, regardless of this bill.

How's that? Don't we have to go by the new tax rules in 2023?

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[Donald Stanfield]

How's that? Don't we have to go by the new tax rules in 2023?

Taxes are always a year behind. When you do taxes by April next year those are THIS YEAR’s taxes so this year’s rules apply.

 

[Jac]

How's that? Don't we have to go by the new tax rules in 2023?

Good detail on the EV credit’s implementation in the proposed bill:

https://electrek.co/2022/07/27/senate-moves-forward-ev-tax-credit-reform-tesla-tsla/

 

[freshpow]

As one of those buyers I am going to have to disagree with you. If the market turned, and I didn’t have a preorder I would absolutely hold off on buying a luxury good in a down economy. People with the sort of money you’re talking about aren’t driving cobbled together vehicles. They can easily wait a year or two.

When you have the ability to buy more or less whatever you want one or two things happens. You either indulge every whim and quickly go broke or you learn how to use money and only make decisions when advantageous to you. In a down market the only people buying indulgent purchases are the foolish and billionaires.

Everyone wealthy but not billions is biding their time and waiting for things to go on fire sale. Whenever a recession occurs people default left and right and you can build equity really quickly.

Honestly if I didn’t have a preorder and was walking into instant equity I wouldn’t be buying the Rivian this year. I would buy some more property or make some smart investments at the bottom.

No offense, but your personal investment strategy doesn't make a market. For every one of you, there will be 5 people who want a Rivian and want it NOW. It's a shiny new toy, the likes of which have never been seen before, and that's not going to change overnight. Sure, resale prices will probably continue to take a walk back, but as it stands they are still selling for $130k+ and it's easy enough to keep tabs on the resale market. That's all ignoring the 3/1 price increase, which essentially makes this a bulletproof "investment" in the near term for anyone with an early pre-order.

 

[Donald Stanfield]

No offense, but your personal investment strategy doesn't make a market. For every one of you, there will be 5 people who want a Rivian and want it NOW. It's a shiny new toy, the likes of which have never been seen before, and that's not going to change overnight. Sure, resale prices will probably continue to take a walk back, but as it stands they are still selling for $130k+ and it's easy enough to keep tabs on the resale market. That's all ignoring the 3/1 price increase, which essentially makes this a bulletproof "investment" in the near term for anyone with an early pre-order.

That’s at a favorable interest rate. Paying over market isn’t a good strategy and most people who can actually afford a 130k dollar car regardless of financing don’t make a habit of paying above market.

So the people making those above market purchases are financing dependent. As interest rates rise the cost of financing becomes greater. That puts that 130k out of reach for more people with each increase.

 

[SASSquatch]

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.

mabowden I feel you 100% and I'm right behind you. I'm not sure OC is worth waiting for anymore and I might have to finally give up on it. I think Limestone with BM is a very nice combo.

 

[freshpow]

That’s at a favorable interest rate. Paying over market isn’t a good strategy and most people who can actually afford a 130k dollar car regardless of financing don’t make a habit of paying above market.

So the people making those above market purchases are financing dependent. As interest rates rise the cost of financing becomes greater. That puts that 130k out of reach for more people with each increase.

Let me use a simple example for you. With pre-March 1 pricing, you can buy the R1T/R1S for ~$80k. If someone without a preorder wants to purchase that same vehicle, it will cost them ~$100k and they will have to wait 2+ years to take delivery. Even if the bottom falls out and nobody wants to pay $130k, the floor has effectively been set at $100k by Rivian. Someone will scoop up your vehicle for $100k today to avoid the long wait and you'll walk away with a profit. In the near-term, it's not at all a gamble - getting back to your original point.

 

[rohobono]

I'm not sure I'm thinking in percentages here, it has more to do with the cash and flow.

That example is totally a valid way to look at it, in that scenario I would say it just depends on where that extra 2k, or whatever the difference comes out to, is coming from. If it's being diverted from another luxury, then I would say the Rivian is still within your budget and you just need to decide if it's worth diverting those funds or not. However, if that difference puts the Rivian "out of reach" like the comment you replied to suggested(I probably should have just replied to them directly). Then I would argue that the Rivian was never realistically in that person's budget to begin with.

I guess you could argue we don't need the boat

Yes, I would absolutely argue that you don't need a boat . To me that kind of lifestyle is exactly why comments like "stretching their budget to be better for the planet" or "being part of a mass group of people switching to EV's" come off as so disingenuous. I really don't see how someone can reconcile that kind of lifestyle with any amount of legitimate concern for the environment.

I'm not trying to say that anyone who wants to claim they care about the environment needs to start living off grid on a sustainable homestead or anything like that. But, to me, there's a huge difference between living comfortably and caring about the environment and living in excess and caring about the environment. And when it's the latter I find it extremely hard to believe that the care for the environment is in any way genuine.

I don't think we are all going to agree on everything Nor should we. Otherwise forums would have nothing to talk about.

I can definitely agree with that!

 

[Gobnu]

Wow, they're really making it difficult to be an early adopter

It's not like there is a shortage of early adapters. The point is to move the needle on rate of adoption, which will require a lot of vehicles way less than 80k per.

 

[Donald Stanfield]

Let me use a simple example for you. With pre-March 1 pricing, you can buy the R1T/R1S for ~$80k. If someone without a preorder wants to purchase that same vehicle, it will cost them ~$100k and they will have to wait 2+ years to take delivery. Even if the bottom falls out and nobody wants to pay $130k, the floor has effectively been set at $100k by Rivian. Someone will scoop up your vehicle for $100k today to avoid the long wait and you'll walk away with a profit. In the near-term, it's not at all a gamble - getting back to your original point.

Assuming there aren't greater economic forces at work. If the market tanks people aren't going to be in the market for a 100K dollar vehicle in near the numbers that are during an up market. I get what you're saying but what you're missing is things are only worth the price that people are willing to pay for it. IF there are no buyers it doesn't matter what the market for Rivians are.

Let's say that interest rates go sky high. That does a couple things, first it takes out lots of people on the preorder list. People who could afford the car at 4% might not be able to or want to at 8%. So that shortens up the preorder list lessening the wait time for the sort of people you're talking about. Second thing it does is make people reevaluate the money they're spending. If you're worried that you might be subject to a layoff then for you that's not a time to spend money.

Now in this scenario demand has shrunk a great deal, so for that same 100K why would I buy a used Rivian when I can order exactly the one I want from the factory fresh off the showroom floor?

 

[Donald Stanfield]

I'm not trying to say that anyone who wants to claim they care about the environment needs to start living off grid on a sustainable homestead or anything like that. But, to me, there's a huge difference between living comfortably and caring about the environment and living in excess and caring about the environment. And when it's the latter I find it extremely hard to believe that the care for the environment is in any way genuine.

Who's definition are we using for what's excessive? Because I guarantee everyone here has a different definition of that term. While some people consider a boat superfluous others consider it a necessity for family bonding time. People spend money based on wants in the western world and what wants vary. So your collection of whatever might seem entirely wasteful to me I'm sure I have things you feel the same way about.

So your only the people who live the way I do care about this or that argument is pretty disingenuous in and of itself because I guarantee that people with priorities that don't match yours feel the exact same way about you. For example I find it hard to believe that someone would waste electricity and internet bandwidth on commenting on an Internet forum if they claim to care about the environment. See, your presence here is also by definition wasteful and therefore just as hypocritical as you're deriding someone else.

 

[McMoo]

Did Manchin actually get what he wants, basically no EV credits? I posted a question/comment a few pages back that it wasn’t clear any EVs currently sold would be eligible for $7,500 and that seems to be confirmed.

https://www.wsj.com/articles/auto-m...5TUOvUZ1MKVi0AlqzrLKFV46o7webc9yqqO2WjKgQiu9E

 

[RoadRunner]

The EV credits section of this bill is a shitshow, it does seem like very few if any vehicles would qualify and it will take years to bring the battery supply chains into compliance. Yes, it sounds like Manchin got what he wanted in it, but it seems doubtful that it will pass as written - all the EV makers are complaining about it and lobbying to get it changed to something more reasonable and workable. Hopefully they can come up with a better solution before this thing passes, or just leave the existing credits alone for now.

 

[rohobono]

Who's definition are we using for what's excessive?

Well, mine of course, hence:

But, to me,

Though I'm sure most people, even in the "western world of money and wants", would agree that owning your own boat would qualify as at least a little bit excessive.

others consider it a necessity for family bonding time

Well, I feel sorry for those people, even more so for their families.

See, your presence here is also by definition wasteful and therefore just as hypocritical as you're deriding someone else.

I never claimed to care about the environment, only that I doubted the sincerity of someone who claims they do while also looking to purchase a luxury ev and owning a boat. Even if I had, equating my minuscule additional use of electricity to make these comments to the excess of owning and operating your own boat is patently absurd.

 

[Donald Stanfield]

I never claimed to care about the environment, only that I doubted the sincerity of someone who claims they do while also looking to purchase a luxury ev and owning a boat. Even if I had, equating my minuscule additional use of electricity to make these comments to the excess of owning and operating your own boat is patently absurd.

It's not any more absurd than you deriding someone else for having a boat.

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