Possible Tax Credit Loss

Aurum

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I’m curious if you think in the event the tax credit goes away next year (let’s hope not!), do you think Rivian and/ or other EV manufacturers will cut prices to some degree in order to remain a competitive choice? It seems that a lot of new EV manufacturers are actually relying on this credit to maintain profit margins.
 

Lmirafuente

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This is a good question to ask. I have not heard of any changes yet on the Federal Tax credit of $7,500 going away. I believe Tesla is close to their allotted number, but since Rivian is new they are well below that watermark.

I can tell you in California, it appears we just passed a bill to raise the tax credit from $2,500 to $7,500 when purchasing an EV from July 2020 onward until we hit the 5M EV sold or December 2030 whichever comes first ( https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200AB1046 )

So we could have potential $15,000 credit combined which is cool.

As more companies bring in EV into the market, I think that will drive costs down. If you look at the VW iBuzz coming out in 2022 at about $23K--I am not comparing this to the Rivian at all, I think the market will self correct regarding pricing. I am not saying Rivian will reduce their price. I am simply saying there are no current alternatives but a ModelX ($$$).
 

azjohnny

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With Tesla as their tax credit has been decreased they have lowered their prices
 

Estolworthy

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I wish there was a way to sell Rivian my Federal, State and electric provider rebate to get an instant price reduction at time of purchase.
 

Lmirafuente

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You never know. Rivian, and I am guessing Cox Automotive, are watching these forums for ideas.

the challenge here is every person will have different tax situations.

Regarding price....I think there is a window of time between when there are few EV’s to when there are many EV options that will drive purchase decisions and pricing. If you want an EV to save long term costs, you may want the Tesla Model 3 vs the R1T/R1S.. two different vehicles I know...but money is money especially if somebody simply wants an EV.

When VW starts to deliver thief I.D. Buzz rumored between $23K-$40K in 2022. https://www.cnet.com/roadshow/reviews/2022-volkswagen-i-d-buzz-preview/ will that drive Rivian prices down. Probably not. It will be interesting however when the Fords EV truck/suv, the Atlas truck, and the Tesla truck become available if price adjustments occur. Basic economics on supply and demand. As an early adopter we will pay a premium.

ideally I want to buy made in USA.
 

rconkling

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With Tesla as their tax credit has been decreased they have lowered their prices
Yes but they didn't lower it dollar for dollar. So the effective price still increased.
 

JeffOutWest

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I believe there is currently a 200,000 vehicle cap on the federal credit before the manufacturer starts to lose the tax break provided to purchaser. My suspicion is that the next-gen Rivian, coming out maybe around the time the R1S/R1T are hitting the 200k mark (or perhaps a little later maybe) will be cheaper and that will help offset the tax break loss. I'm thinking perhaps the R1T/R1S are a little too much money for me, and the next-gen with 800V charging and hopefully lower price, might be the entrance point for me to get a BEV.
 

jjwolf120

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I think that the Rivian will probably start producing their third vehicle before the federal tax credit runs out. Its hard to tell, since we don't really know how many preorders they have. I would expect they will announce a third car after they are producing the R1S & R1T in significant volumes and start producing it 1 to 1.5 years after they announce it. They need to run as fast as they can, monsters are chasing them.
 

DucRider

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We do know they have 100K sold to Amazon, and they will start delivering those in 2021.
If they delivered their 200 thousandth vehicle on or after July 1st, the full Federal Tax Credit would be available for all of that year.

There seems to be about an equal push to extend and reduce/eliminate the tax credit. My guess is that will result in no change to the current tax code in regard to the EV credit. While the President certainly has influence on policy, it is ultimately up to Congress to change the tax code.
 

Coast2Coast

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Earlier this year, the California legislature passed a bill that limits or perhaps eliminates state tax credits on EVs costing more than $60K. When I was communicating via email with Rivian's PR department, they said they were aware of this pricing challenge with respect to California. I'm not sure how the bill you mention, raising the tax credit from $2500 to $7500, interfaces with the bill I'm mentioning, but it appears likely that the cost of a BEV and perhaps the income of a BEV buyer may affect how much of a tax credit is available in California.

This is a good question to ask. I have not heard of any changes yet on the Federal Tax credit of $7,500 going away. I believe Tesla is close to their allotted number, but since Rivian is new they are well below that watermark.

I can tell you in California, it appears we just passed a bill to raise the tax credit from $2,500 to $7,500 when purchasing an EV from July 2020 onward until we hit the 5M EV sold or December 2030 whichever comes first ( https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200AB1046 )

So we could have potential $15,000 credit combined which is cool.

As more companies bring in EV into the market, I think that will drive costs down. If you look at the VW iBuzz coming out in 2022 at about $23K--I am not comparing this to the Rivian at all, I think the market will self correct regarding pricing. I am not saying Rivian will reduce their price. I am simply saying there are no current alternatives but a ModelX ($$$).
 

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I'm a little surprised Illinois hasn't restored its tax credit given what Rivian's doing for Normal.
 

Edax Rerum

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Well, it is Illinois. The state seems to thrive on more, and higher, taxes (or fees, because those aren't "taxes") whenever there's an opportunity.
 

EyeOnRivian

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I'm a little surprised Illinois hasn't restored its tax credit given what Rivian's doing for Normal.
Illinois had one? Even if they did they appear to be going in the opposite direction. The only EV "incentive" I was aware of in Illinois was the reduced vehicle registration fee - $36 every two years. Illinois legislators not only eliminated it last July but increased it to $100 more than what it costs to register an ICE vehicle since the state gets no gasoline tax from EV owners.
 

Pherdnut

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Illinois had one? Even if they did they appear to be going in the opposite direction. The only EV "incentive" I was aware of in Illinois was the reduced vehicle registration fee - $36 every two years. Illinois legislators not only eliminated it last July but increased it to $100 more than what it costs to register an ICE vehicle since the state gets no gasoline tax from EV owners.
I've seen occasional mention of one. Might have predated Tesla and been more of a hybrid thing.
 
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