Potential Change to $7,500 EV Tax Credit

[LoneStar]

I don't think the rules (laws) governing MSRP are flexible. Its whatever all the manufacturers use to create a Window Sticker from the VIN. Using this example from F-150 Hybrid that I ordered (not actually buying) here's the format.

The one area that Rivian can "mess around" is with official Discounts since those are factored into the final MSRP value as shown below. I would expect that Mfg. Discount programs themselves must adhere to certain rules or at least get published to be applied equally and fairly.

Ford did publish a summary of available Discounts based on trim and group-level selected. For instance the 701A is the "Platinum High" configuration, otherwise that $500 discount disappears.

Note that Mfg. std. "Destination & Delivery" charge is also additive to the MSRP value.

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[sevengroove]

I don't think the rules (laws) governing MSRP are flexible. Its whatever all the manufacturers use to create a Window Sticker from the VIN. Using this example from F-150 Hybrid that I ordered (not actually buying) here's the format.

The one area that Rivian can "mess around" is with official Discounts since those are factored into the final MSRP value as shown below. I would expect that Mfg. Discount programs themselves must adhere to certain rules or at least get published to be applied equally and fairly.

Ford did publish a summary of available Discounts based on trim and group-level selected. For instance the 701A is the "Platinum High" configuration, otherwise that $500 discount disappears.

Note that Mfg. std. "Destination & Delivery" charge is also additive to the MSRP value.

Hmm interesting - but aren't there examples of dealerships charging well over MSRP for rare vehicles (like the Mach E, or Rav4 Prime)? The MSRP would remain the same, even if the customer pays a few grand over, wouldn't it?

 

[azbill]

I think there are multiple ways to work around the limit. MSRP = manufacturer suggested retail price, not the sale price that the taxpayer ends up paying. So Rivian can "suggest" that their max pack R1's are all under 80k and still charge you more for it. You can put $80k as the MSRP on the tax credit form and not be wrong, and still get the credit.

It's a really silly arbitrary cutoff for sure, a sliding scale would have been much better.

The government would catch on to this and charge them with fraud.

 

[LoneStar]

Hmm interesting - but aren't there examples of dealerships charging well over MSRP for rare vehicles (like the Mach E, or Rav4 Prime)? The MSRP would remain the same, even if the customer pays a few grand over, wouldn't it?

No. "Mark-ups" are on top of MSRP which is set by the factory (Manufacturer). They often appear as a secondary window sticker on the vehicle, especially in the dealer's show room.

You do raise a good point still. Hopefully the IRS gets the published MSRP values for various make/model/trims from vehicle mfgs. That would be used to determine eligibility for the tax discount. If you had to individually provide proof of purchase price then mark-ups would, or surely could screw things up. I've never paid a mark-up price as a matter of principle. But I highly doubt the Sales Contract lists the markup separately from the "Asking Price" on the top line of the purchase form.

 

[staples]

Both Rivian and Tesla are non-union. So neither would be eligible for the $2500 credit.

 

[bajadahl]

Both Rivian and Tesla are non-union. So neither would be eligible for the $2500 credit.

Non-Union but they are made in the USA so in the proposed legislation there is the base $7500 Credit plus $2500 for made in America. That's a possible 10k credit... or am I missing something?

 

[thrill]

American taxpayers being legislated to subsidize unionized shops doesn't seem quite right.

 

[staples]

Non-Union but they are made in the USA so in the proposed legislation there is the base $7500 Credit plus $2500 for made in America. That's a possible 10k credit... or am I missing something?

Nope. You are correct. For some reason I was thinking the max of all the credits was $10k.

 

[Blueassassin]

I’m ok with a price cap, just wish it was sliding scale vs. a single hard limit. The extra incentive for union workers is complete BS.

I second the union BS. When Ford did the lightning reveal and the guy got up there and started talking about his brothers I was ready to turn it off.

 

[sevengroove]

The purpose of tax credits is to incentivize adoption by people who couldn't otherwise afford it, not to reward you for having expensive tastes.

Thank you, couldn't have said it better. Sure, I agree that it is a bummer for those who are waiting for the Max pack because it's money taken off the table and that sucks no matter how you slice it. But to complain about not receiving a $7,500 tax incentive meant to support mainstream EV adoption while being in a position to drop $90k on one luxury vehicle is not a good look.

By virtue of being in the market for a $70k+ vehicle we are all in a position of privilege, and we don't need handouts. This might be an unpopular stance but I'd be fine even if they dropped the MSRP limit to $60k. $10k off a Mach E or Vw ID.4 or Model Y or Ioniq 5 will do much more to EV adoption nationwide than $10k on a Rivian.

 

[kylealden]

By virtue of being in the market for a $70k+ vehicle we are all in a position of privilege, and we don't need handouts. This might be an unpopular stance but I'd be fine even if they dropped the MSRP limit to $60k. $10k off a Mach E or Vw ID.4 or Model Y or Ioniq 5 will do much more to EV adoption nationwide than $10k on a Rivian.

Totally agree. I'd actually prefer to see the limit closer to $50k than $80k - this should be rewarding entry-level EV buyers and pushing prices down.

$65k+ EVs have defined the market long enough, we're well past the point where the halo effect of more performance cars and luxury SUVs is a necessary driver of adoption.

 

[Friscorays]

Bummer about March 1, 2022.

 

[SeaGeo]

Totally agree. I'd actually prefer to see the limit closer to $50k than $80k - this should be rewarding entry-level EV buyers and pushing prices down.

$65k+ EVs have defined the market long enough, we're well past the point where the halo effect of more performance cars and luxury SUVs is a necessary driver of adoption.

I am so confused by the quote your post had. it makes a wonderful point, but I didn't say it. Lol.

 

[kylealden]

I am so confused by the quote your post had. it makes a wonderful point, but I didn't say it. Lol.

LOL - no idea how that happened but I think I fixed it.

 

[nfrank]

I think Tesla did something like this for a little while, but what Rivian can do is sell me a "Max Pack Equipped " package for no markup over the 300 mile pack. Then charge me $10,000 once I get home for a software unlock of the extra capacity.

Maybe to deter people from automatically ordering the "Max Pack Equipped" package, just mark it up $1,000 and make the software an extra $9,000.

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