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

[LoneStar]

this is most curious.... so a binding purchase agreement executed in 2022 for a vehicle that almost surely will be delivered (deliverable) in 2023, or maybe even as far out as early 2024 will be acceptable to IRS? And does that mean Buyer has this transaction as a 2022 tax-year event? Meaning file for the fed credit before even taking physical possession of it? I may be over-extrapolating here.

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[linkwpc]

What if you do not want the old tax credit and you want the new one. How would that work?

 

[agame32]

this is most curious.... so a binding purchase agreement executed in 2022 for a vehicle that almost surely will be delivered (deliverable) in 2023, or maybe even as far out as early 2024 will be acceptable to IRS? And does that mean Buyer has this transaction as a 2022 tax-year event? Meaning file for the fed credit before even taking physical possession of it? I may be over-extrapolating here.

I think that’s a totally legit point and I don’t see how this could span more than at most the two consecutive years for 2022+2023. Others have mentioned filing amendments, so maybe that’s the answer, but certainly seems non-trivial and unclear.

 

[Rivian_Hugh_III]

Maybe not actual configurations, but maybe the pricing scheme?

When the law says "binding" I interpret it to require that it be binding on both parties. And a contract that is missing material terms is generally not enforceable (with state by state variations, of course). Price is generally considered a KEY MATERIAL term. Binding contract also means that if Rivian doesn't follow through, buyers could have a claim against them too. Potential for Pandora's box to open if too many pieces are left open ended.

Good point, otherwise you could fulfill your Rivian purchase agreement by buying a T-Shirt through the online store!

 

[agame32]

What if you do not want the old tax credit and you want the new one. How would that work?

First off, may I please have your old credit.

Secondly, I suspect you just take delivery in 2023+ and would be eligible, but note that there are battery resources & components provisions that could exclude Rivian vehicles.

 

[mabowden]

What if you do not want the old tax credit and you want the new one. How would that work?

I'm having a hard time understanding why this would be advantageous in any situation?

 

[Canthoney]

I put in a reservation a couple weeks back for an R1S, I couldn’t obviously configure it because they had changed it a while back. Would I be able to get a PBA for my order as well? Or is this only going to apply to people who have launch edition or pre-march pre-orders?

 

[linkwpc]

I'm having a hard time understanding why this would be advantageous in any situation?

At this point in time, I always get a tax refund for about $4k. As how I understand the tax code today, if you get a refund, you will not get any of the $7500 since you do not own anything in taxes. So if I could bypass that, at least with the new tax law, maybe I could get something back??

 

[Taycanfrank]

I really, really doubt these will hold any water whatsoever with the IRS. It's a good marketing move but thinking the IRS will accept a "binding purchase agreement" that doesn't include a VIN is pretty far fetched.

I imagine for the IRS it will be simple: the date you have a VIN is the date the rules apply to your purchase of that VIN.

Anything else is really, really wishful thinking.

 

[emoore]

At this point in time, I always get a tax refund for about $4k. As how I understand the tax code today, if you get a refund, you will not get any of the $7500 since you do not own anything in taxes. So if I could bypass that, at least with the new tax law, maybe I could get something back??

It doesn't matter how much of a refund you get, it matters how much tax you paid. So if you paid 15K in taxes and got a 4k refund then you owed 11k in taxes and will get the full 7500.

 

[Canthoney]

That's up to Rivian. Still no details on what the BPAs or other binding agreements will look like for folks who don't have a delivery around the corner.

Yeah I get it. It’s gotten complicated for sure. I guess I could always wait for the 2024 small pack and dual motor, but there’s no guarantee that they won’t raise prices for that either to over the $80k threshold. I really wish they would’ve given a transition for manufacturers, but oh well.

 

[mabowden]

At this point in time, I always get a tax refund for about $4k. As how I understand the tax code today, if you get a refund, you will not get any of the $7500 since you do not own anything in taxes. So if I could bypass that, at least with the new tax law, maybe I could get something back??

That is not how the tax credit works. You do not need to owe money in order to claim it. You need to have at least a 7500 tax liability in order to claim it (pay at least $7500/yr in fed taxes) As long as you've paid it you are good to go. I am assuming most people buying a Rivian hit this mark (except for very specific situations).

 

[Friscorays]

this is most curious.... so a binding purchase agreement executed in 2022 for a vehicle that almost surely will be delivered (deliverable) in 2023, or maybe even as far out as early 2024 will be acceptable to IRS? And does that mean Buyer has this transaction as a 2022 tax-year event? Meaning file for the fed credit before even taking physical possession of it? I may be over-extrapolating here.

 

[AdamsFan1983]

But if they convert reservations to binding buyers agreements, I can’t tell entitled people that don’t have their vehicles yet that Rivian doesn’t owe them anything…

 

[Canthoney]

I really, really doubt these will hold any water whatsoever with the IRS. It's a good marketing move but thinking the IRS will accept a "binding purchase agreement" that doesn't include a VIN is pretty far fetched.

I imagine for the IRS it will be simple: the date you have a VIN is the date the rules apply to your purchase of that VIN.

Anything else is really, really wishful thinking.

What do you mean? If Fisker is already doing it then it must be legitimate!! /s

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