Rivian to offer Binding Purchase Agreements (to help obtain EV tax credit)

[gordonrands]

My bet is Saturday before Congress heads back home (they are all off on recess after Friday).

We should all contact the White House and ask Biden to delay signing the bill for a week or two after the House passes it so that all the EV manufacturers can get their binding agreements written and out to us and we can get them signed. I'm pretty sure Biden wants to see as many EVs on the road as possible.

https://www.whitehouse.gov/contact/

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[gordonrands]

We should all contact the White House and ask Biden to delay signing the bill for a week or two after the House passes it so that all the EV manufacturers can get their binding agreements written and out to us and we can get them signed. I'm pretty sure Biden wants to see as many EVs on the road as possible.

https://www.whitehouse.gov/contact/

Here is the message I sent to the White House. I'm also going to send it to my Senators, who ought to be interested as I live in Illinois, home of the Rivian factory.

----------

I am so thrilled and grateful that the Inflation Reduction Act has passed the Senate, and am praying that it will pass the House as expected. I look forward to you signing it.

BUT I ASK YOU TO PLEASE DELAY SIGNING IT FOR A WEEK OR TWO. Here is why.

I am one of hundreds of thousands of Americans who have placed reservations on electric vehicles. Due to the supply chain difficulties that have plagued the industry those orders have huge delays. I reserved a Rivian R1T pickup in April 2019 with a max pack (400 mile range) battery, and the best estimate I have is for a "first half of 2023" delivery.

My family's adjusted gross income is under $150K, so we meet the income limitations for the tax credit in the new bill, but the truck I've ordered will not meet the $80K MSRP limitation in the bill. In addition, it will not meet the US made battery requirements. Thus the only way for me (and others) to get the tax credit is to enter into a Binding Purchase Agreement for later delivery. I must sign this BEFORE you sign the bill into law.

Rivian (made in Normal Illinois) is trying to develop an appropriate Binding Purchase Agreement form, and then get that to those who have already ordered their vehicles. Other EV makers are doing the same.

In the case of pickup trucks and SUVs, the $80K MSRP limit is going to be hard to meet in the future. And yet nothing will jumpstart widespread EV adoption like getting EV trucks and SUVs on the road. Under the provisions of the IRA this will not happen for several years in large numbers unless those who have already ordered the vehicles have a chance to lock-in their orders under the old EV tax credit using the Binding Purchase Agreement provision of the legislation.

In the long run, I urge you to support adjustments in the EV tax credit provisions. But in the short run, please hold off on signing the bill so that thousands like me can lock in a Binding Purchase Agreement on an EV before you sign the bill. Thank you!

 

[agame32]

With RJ in Washington he definitely knows the deal.

Sweet lapel pin!

 

[R1Sky Business]

That's the goal. The House is expected to vote on Friday. But that's not the critical date - the Act only becomes effective when Biden signs it which, if the House goes Fri, wouldn't be until next week. Still not much time, but at least it gives us a couple extra days.

Rivian doesn't work on a "days" timeline

 

[AxelR]

Time for a coup

Too soon…

 

[AxelR]

So I’d like to get the tax credit but some people seem to be losing their mind.
If you can put in so much effort into contacting Rivian multiple times and now the White House to ask the President who just recovered from COVID to hold off on signing one of the most important acts of his presidency maybe just become a lobbyist you’ll have better luck.
Maybe we just need to chill out.

 

[Gamma rays]

From what I understand - having read the whole thread - I agree. One thing that was mentioned in one post that I am not sure of, however, is whether a configuration of $91.5K (max pack, Camp Kitchen, a few adventure package options, 4/19/19 reservation date) will qualify for the existing $7500 tax credit with the preorder IF (as is completely likely) the vehicle isn't delivered until after April 15 2023. I know that it won't qualify without a BPA, but will it qualify with one?

If not, I clearly need to change my configuration to large pack battery and no Camp Kitchen, which would get me under $80K.

But if it would qualify, then the impossibility of qualifying for my existing configuration in the future and getting the tax credit would seem to be one additional argument (along with avoiding the price increase that applies to post-May 2022 orders) that I should stay with my "deluxe" configuration, even if it turns out that I don't end up wanting the Camp Kitchen, or even if I end up eventually deciding that the Silverado or Cybertruck makes more sense for me. Such configurations are likely to be nearly impossible to get in the future unless you don't need the tax credit OR the tax credit $80K MSRP provision is modified in the future.

I am analyzing this correctly, aren't I? Someone ought to be interested in buying a Camp Kitchen for at least $5K, or the entire vehicle for at least $90K, even a year or two down the road, right?

(And I can continue to wait until next year for delivery, and financially would prefer to, as my family's adjusted gross income is well under $150K per year, let alone under $300K).

I can understand your hesitation because there are several uncertainties at play. Assuming the PBA we are going to sign (fingers-crossed) will grandfather us on the current tax credit rules, there is no price cap to be concerned about (Didn't Teslas that costed over $100K qualify?).

I am not sure why delivery before/after April 15, 2023 matters. Perhaps I am not fully informed of the transition rule?

Even if your MSRP & income fall under the cap when they go into effect, the sourcing requirement might make all Rivians ineligible without some sort of waiver.

GR

 

[Dublin ‘Eer]

From what I understand - having read the whole thread - I agree. One thing that was mentioned in one post that I am not sure of, however, is whether a configuration of $91.5K (max pack, Camp Kitchen, a few adventure package options, 4/19/19 reservation date) will qualify for the existing $7500 tax credit with the preorder IF (as is completely likely) the vehicle isn't delivered until after April 15 2023. I know that it won't qualify without a BPA, but will it qualify with one?

If not, I clearly need to change my configuration to large pack battery and no Camp Kitchen, which would get me under $80K.

But if it would qualify, then the impossibility of qualifying for my existing configuration in the future and getting the tax credit would seem to be one additional argument (along with avoiding the price increase that applies to post-May 2022 orders) that I should stay with my "deluxe" configuration, even if it turns out that I don't end up wanting the Camp Kitchen, or even if I end up eventually deciding that the Silverado or Cybertruck makes more sense for me. Such configurations are likely to be nearly impossible to get in the future unless you don't need the tax credit OR the tax credit $80K MSRP provision is modified in the future.

I am analyzing this correctly, aren't I? Someone ought to be interested in buying a Camp Kitchen for at least $5K, or the entire vehicle for at least $90K, even a year or two down the road, right?

(And I can continue to wait until next year for delivery, and financially would prefer to, as my family's adjusted gross income is well under $150K per year, let alone under $300K).

From what I understand - having read the whole thread - I agree. One thing that was mentioned in one post that I am not sure of, however, is whether a configuration of $91.5K (max pack, Camp Kitchen, a few adventure package options, 4/19/19 reservation date) will qualify for the existing $7500 tax credit with the preorder IF (as is completely likely) the vehicle isn't delivered until after April 15 2023. I know that it won't qualify without a BPA, but will it qualify with one?

If not, I clearly need to change my configuration to large pack battery and no Camp Kitchen, which would get me under $80K.

But if it would qualify, then the impossibility of qualifying for my existing configuration in the future and getting the tax credit would seem to be one additional argument (along with avoiding the price increase that applies to post-May 2022 orders) that I should stay with my "deluxe" configuration, even if it turns out that I don't end up wanting the Camp Kitchen, or even if I end up eventually deciding that the Silverado or Cybertruck makes more sense for me. Such configurations are likely to be nearly impossible to get in the future unless you don't need the tax credit OR the tax credit $80K MSRP provision is modified in the future.

I am analyzing this correctly, aren't I? Someone ought to be interested in buying a Camp Kitchen for at least $5K, or the entire vehicle for at least $90K, even a year or two down the road, right?

(And I can continue to wait until next year for delivery, and financially would prefer to, as my family's adjusted gross income is well under $150K per year, let alone under $300K).

Assuming you said by 4/15/23 since that’s the filing deadline. You can always do an extension to push back the filing deadline until 10/15/23. You should have your vehicle by then. You’d still have to make an estimated payment for the taxes due by 4/15/23 but would have the additional 6 months to finalize your 2022 return.

 

[Guy]

Here is the message I sent to the White House. I'm also going to send it to my Senators, who ought to be interested as I live in Illinois, home of the Rivian factory.

----------

I am so thrilled and grateful that the Inflation Reduction Act has passed the Senate, and am praying that it will pass the House as expected. I look forward to you signing it.

BUT I ASK YOU TO PLEASE DELAY SIGNING IT FOR A WEEK OR TWO. Here is why.

I am one of hundreds of thousands of Americans who have placed reservations on electric vehicles. Due to the supply chain difficulties that have plagued the industry those orders have huge delays. I reserved a Rivian R1T pickup in April 2019 with a max pack (400 mile range) battery, and the best estimate I have is for a "first half of 2023" delivery.

My family's adjusted gross income is under $150K, so we meet the income limitations for the tax credit in the new bill, but the truck I've ordered will not meet the $80K MSRP limitation in the bill. In addition, it will not meet the US made battery requirements. Thus the only way for me (and others) to get the tax credit is to enter into a Binding Purchase Agreement for later delivery. I must sign this BEFORE you sign the bill into law.

Rivian (made in Normal Illinois) is trying to develop an appropriate Binding Purchase Agreement form, and then get that to those who have already ordered their vehicles. Other EV makers are doing the same.

In the case of pickup trucks and SUVs, the $80K MSRP limit is going to be hard to meet in the future. And yet nothing will jumpstart widespread EV adoption like getting EV trucks and SUVs on the road. Under the provisions of the IRA this will not happen for several years in large numbers unless those who have already ordered the vehicles have a chance to lock-in their orders under the old EV tax credit using the Binding Purchase Agreement provision of the legislation.

In the long run, I urge you to support adjustments in the EV tax credit provisions. But in the short run, please hold off on signing the bill so that thousands like me can lock in a Binding Purchase Agreement on an EV before you sign the bill. Thank you!

Good letter but the family adjusted income can be $300k not $150k

 

[Guy]

Sure would be nice to know battery content percentages to make a more informed decision on signing a PBA at this point.

Yes that would be good to know since I have a 2023 expected delivery. The new credit is payable at time of delivery so no more Tex filings which is a plus. Income and price limits are not an issue. So there could be benefit to waiting until next year and the new rules.

 

[Yossarian]

From what I understand - having read the whole thread - I agree. One thing that was mentioned in one post that I am not sure of, however, is whether a configuration of $91.5K (max pack, Camp Kitchen, a few adventure package options, 4/19/19 reservation date) will qualify for the existing $7500 tax credit with the preorder IF (as is completely likely) the vehicle isn't delivered until after April 15 2023. I know that it won't qualify without a BPA, but will it qualify with one?

If not, I clearly need to change my configuration to large pack battery and no Camp Kitchen, which would get me under $80K.

But if it would qualify, then the impossibility of qualifying for my existing configuration in the future and getting the tax credit would seem to be one additional argument (along with avoiding the price increase that applies to post-May 2022 orders) that I should stay with my "deluxe" configuration, even if it turns out that I don't end up wanting the Camp Kitchen, or even if I end up eventually deciding that the Silverado or Cybertruck makes more sense for me. Such configurations are likely to be nearly impossible to get in the future unless you don't need the tax credit OR the tax credit $80K MSRP provision is modified in the future.

I am analyzing this correctly, aren't I? Someone ought to be interested in buying a Camp Kitchen for at least $5K, or the entire vehicle for at least $90K, even a year or two down the road, right?

(And I can continue to wait until next year for delivery, and financially would prefer to, as my family's adjusted gross income is well under $150K per year, let alone under $300K).

I'm not an expert, but after looking at the existing IRS rules for the tax credit, the amount is based on battery size, with $7,500 being the upper limit regardless of size. There is no mention of MSRP. My understanding is that any EV meeting the battery criteria will quality for the credit, up to the maximum $7.5k cap.

Under the new bill there are various criteria for qualifying for the credit, only one of which is the vehicle's MSRP. For pick-up trucks and SUV's, that MSRP limit is $80k, but there are also a host of manufacturing requirements and personal income criteria that apply and must be met to qualify for the credit. The bill makes other changes as well, but those don't apply wrt to Rivian.

The language that grandfathers the use of the existing tax credit, for which all Rivians are presently eligible at the max $7,500 level, is in the new tax bill that will soon become law. Having a binding contract of sale like a Prelimianry Buyer's Agreement (PBA), means that for the purposes qualifying for the tax credit under the existing rule, the sale takes place and the vehicle is considered to have been "placed in service" when the PBA was executed. Here is the actual language from the new bill:
"(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 defined 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 Secretary’s delegate, may prescribe) to treat such vehicle having been placed in service on the day before the date of enactment of this Act."

Bottom line is that the neither the Camp Kitchen (or any option for that matter) nor your pre-order date matter for the tax credit as it presently exists. What matters is having a signed and executed PBA in place before the new bill is signed into law.

 

[Jac]

“,

I'm not an expert, but after looking at the existing IRS rules the tax credit, the amount is based on battery size, with $7,500 being the upper limit regardless of size. There is no mention of MSRP. My understanding is that any EV meeting the battery criteria will quality for the credit, up to the maximum $7.5k cap.

Under the new bill there are various criteria for qualifying for the credit, only one of which is the vehicle's MSRP. For pick-up trucks and SUV's, that MSRP limit is $80k, but there are also a host of manufacturing requirements and personal income criteria that apply and must be met to qualify for the credit. The bill makes other changes as well, but those don't apply wrt to Rivian.

The language that grandfathers the use of the existing tax credit, for which all Rivian's are presently eligible at the max $7,500 level, is in the new tax bill that will soon become law. Having a binding contract of sale like a BPA, means that the purposes of the tax credit under the existing rule, the sale takes place and the vehicle is considered to have been "placed in service" when the BPA was executed. Here is the actual language from the new bill:
"(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 defined 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 Secretary’s delegate, may prescribe) to treat such vehicle having been placed in service on the day before the date of enactment of this Act."

Bottom line is that the neither the Camp Kitchen (or any option for that matter) nor your pre-order date matter for the tax credit as it presently exists. What matters is having a signed and executed BPA in place before the new bill is signed into law.

100%. Also, please note the transition rule language says, “may elect…” not “must” or “shall.” If, for some reason when you actually receive your Rivian, you prefer to apply the new EV tax credit rule rather than the current rule, this language suggests that is the taxpayer’s choice - if the taxpayer signed a binding purchase agreement before the new law‘s enactment.

 

[Yellow Buddy]

Did my daily check this AM. Still no agreement ready, same language in chat.

 

[Animalhouse]

Hmmm…..
I’m not even scheduled till second half of next year and am set on getting a Rivian. Tax credit or not I plan to get one just waiting here in the south east to get the word any word lol.

 

[Flexnet]

“,


100%. Also, please note the transition rule language says, “may elect…” not “must” or “shall.” If, for some reason when you actually receive your Rivian, you prefer to apply the new EV tax credit rule rather than the current rule, this language suggests that is the taxpayer’s choice - if the taxpayer signed a binding purchase agreement before the new law‘s enactment.

Great point... I like options. Let me sign PBA and make the choice on which tax credit rule I want to use when the time comes.

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