Newest language on the EV incentive

LordUlhtred

Member
Joined
Sep 3, 2021
Messages
13
Reaction score
25
Location
Fairfax, VA
Vehicles
Model 3
EV Credits language in Reconciliation Bill

To start, all of this is subject to change, but the way it is right now, the language leaves Rivian SUV out of the all the incentives.
  • $4,000 base amount
  • $3,500 if the EV has a battery of at least 40kWh
  • $4,500 if the final assembly occurs at a domestic, unionized plant
  • $500 if at least 50% of components and battery cells are manufactured in the US.
The credit is now refundable, and can be remitted to the dealer at the point of sale. There are also new MSRP restrictions, so any EV above the following MSRP's is ineligible for a credit:
  • $55,000 for a sedan
  • $64,000 for a van
  • $69,000 for an SUV
  • $74,000 for a pickup
The language related to EV incentive starts on page 282. https://waysandmeans.house.gov/site...ans.house.gov/files/documents/SUBFGHJ_xml.pdf

I am not sure if Rivian is doing any Lobbying activities, but i hope they are talking to Congress.
Advertisement

 

BoltEVowner

Well-Known Member
First Name
Charles
Joined
Dec 6, 2020
Messages
69
Reaction score
110
Location
West Georgia, dangerously close to Alabama
First Name
Charles
Vehicles
Chevy BoltEV, Chevy Volt, RAV4, Winnebago View
Occupation
retired physician
Maybe they want you to buy a truck? Just kidding, doesn't make any sense. Wouldn't get too excited, though, very early in the process, and the reconciliation bill might not go anywhere. I hope not, because excess spending is inflationary, and is a tax on everyone, hurts the lower income the most.

If nothing new passes congress, there will still be a $7500 tax credit for everyone for the first 100k vehicles sold (I think). Helps if you pay taxes, but not if you don't. Not a great incentive for the masses, but heck, the vast majority of people that can afford to purchase a new vehicle for over $70k should be making enough money to pay taxes and get the benefit.

I am hoping that they can at least reform the existing law to allow for point of sale rebates regardless of the vehicle price, and for everyone, regardless of income, and end the limitation on number of vehicles sold to qualify. That would do a lot more to incentivize people to go EV, which is the whole idea.
 

kurtlikevonnegut

Well-Known Member
Joined
Sep 1, 2021
Messages
47
Reaction score
129
Location
Charleston, SC
Vehicles
Mazda CX 5, Jeep Cherokee (XJ)

I am not sure if Rivian is doing any Lobbying activities, but i hope they are talking to Congress.
I'm sure they are but the issue here is that the legacy automakers are also lobbying against raising those limits to steer customers towards their cars and they have much deeper pockets and older friendships to leverage.

If I'm Ford or GM and I know most of my SUVs will come in below $70k, this is a huge win for me because for most casual buyers this will make a huge difference in their choice.
 

kurtlikevonnegut

Well-Known Member
Joined
Sep 1, 2021
Messages
47
Reaction score
129
Location
Charleston, SC
Vehicles
Mazda CX 5, Jeep Cherokee (XJ)
Maybe Congress is trying to help us in getting Rivian to cut the SUV to $69k :)
This may have been tongue in cheek, but I think Rivian has to revisit their pricing if this passes as is and I think they probably have a small army of financial analyst running the margin numbers. And I don't think it just applies to the base model either, I think they have to look at some of the color options and adventure package as well.

Consider, if the base model gets knocked down to $67,500 so that you can pick a few colors and still come in at 69k, now the adventure package is in reality a $13k option because you are paying $5,500 for the package in addition to the $8,000 tax credit you just lost. That's a huge factor for most buyers. Realistically, they would need to get the base cost down to $62k or so to still be able to capitalize on this benefit. Whether they have the margin to make that feasible is another story.
 

McMoo

Well-Known Member
Joined
Nov 16, 2020
Messages
54
Reaction score
75
Location
St. Louis
Vehicles
Tesla Model 3 Performance
Pretty obvious legacy automakers influenced this heavily with the union language and price caps. Regardless, as a CPA, I very well know that it’s not gospel so we’ll see what happens. I don’t feel too bad about waiting for my explore model now to see how it plays out.
 

kurtlikevonnegut

Well-Known Member
Joined
Sep 1, 2021
Messages
47
Reaction score
129
Location
Charleston, SC
Vehicles
Mazda CX 5, Jeep Cherokee (XJ)
Pretty obvious legacy automakers influenced this heavily with the union language and price caps. Regardless, as a CPA, I very well know that it’s not gospel so we’ll see what happens. I don’t feel too bad about waiting for my explore model now to see how it plays out.
I think the best case scenario is maintaining the status quo (the current incentive stays unchanged) but frankly considering the lobbying interests involved (Ford, GM, Stellantis, and the UAW) and considering that this is a unilateral bill from the party where those lobbies have the most sway, I think the expectation should be that it will go forward as is.
 

Sdvictor

Well-Known Member
First Name
Victor
Joined
Mar 13, 2021
Messages
128
Reaction score
237
Location
Seattle, WA
First Name
Victor
Vehicles
E-Wagon
The very specific price points definitely benefits Tesla at the expense of Rivian.
 

SeaGeo

Well-Known Member
First Name
Brice
Joined
Jan 12, 2021
Messages
1,248
Reaction score
2,169
Location
Seattle
First Name
Brice
Vehicles
Xc60 T8
Occupation
Engineer
Guess I may be getting a white Adventure R1T and buy the 20s afterword as a second transaction.
 

TXR1S

Member
Joined
Jun 1, 2021
Messages
21
Reaction score
44
Location
TX
Vehicles
R1S on order
I’m curious if the pricing limits apply to base model msrp or as sold? Previously, some limits have applied to the base model msrp (although maybe only in other countries?)

Seems it’s either 1) not too bad at all for Rivian or 2) completely disastrous for Rivian based on this.
 

Sean

Well-Known Member
First Name
Sean
Joined
Dec 28, 2020
Messages
143
Reaction score
414
Location
Georgia
First Name
Sean
Vehicles
GMC
Not sure I know what actually counts towards msrp. Rivian said accessories would be installed at the service center does the count or no?
 
OP
OP

LordUlhtred

Member
Joined
Sep 3, 2021
Messages
13
Reaction score
25
Location
Fairfax, VA
Vehicles
Model 3

PastyPilgrim

Well-Known Member
Joined
May 9, 2021
Messages
58
Reaction score
127
Location
New England
Vehicles
R1T
I don't think that article is addressing accessories in the Rivian way. Like it makes sense that mspr include trim and any alterations to the vehicle (e.g. a sunroof, led headlights, different wheels, upgraded sound, etc.) but the manufacturer selling you a tent to camp in seems like not part of vehicle msrp.

Even if there's some dumb language that says the value is whatever number is at the bottom of a receipt with a vehicle on it (including things like added warranties, service plans, etc), then Rivian would be crazy not to do something like not allowing accessories at config time, but giving you a window after vehicle purchase to order accessories to be delivered with your vehicle. Rivian will obviously have an accessory shop for owners later, so even if they didn't offer you the ability to buy accessories for delivery later, if those accessories meant getting a credit or not getting a credit, then buying accessories after delivery from their shop is a no brainer (even if it means a steep shipping bill).
 

DucRider

Well-Known Member
First Name
Gary
Joined
Oct 21, 2019
Messages
1,458
Reaction score
2,514
Location
rRegon
First Name
Gary
Vehicles
Clarity Electric
MSRP based incentives leave all kinds of room for gaming the system.

Under this scenario, an SUV with an MSRP of $69K that a dealer applies a "market adjustment" of $20K to bringing the actual sale price to $89K would qualify.

Oregon's incentive qualification depends on "Base MSRP" and has a $50K limit (this would allow for the installation of accessories). The Tesla Model Y qualifies, yet the cheapest you can buy/order is $53,990 (destination and handling are not included in the MSRP definition). Huh? Seems since Tesla has run the RWD Standard Range thru EPA, gotten it a Monroney Label and adds on the bigger battery, 2nd motor, etc to the "Base" model.

In Canada, Tesla sells - at least on paper - a software crippled Standard Range Model 3 with 151 kM (94 miles) of range to get under a $45K cap and qualify for Trans Canada's iZEV rebate of $5K. Offering this option (it can be "unlocked" later since it is software limited), allows the non crippled SR and even the SR+ to qualify as well.

Washington States EV incentive is tied to actual purchase price, and that is the metric that makes the most sense.
 
Advertisement

 
Advertisement
Top