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

[Yossarian]

Reply from our guide: (did not fully understand the question it seems but still no clue)

I hope you are well, Happy Monday!

I do not have any information at this time regarding changes in the Tax Credit. I can look into this and get back to you.

Stay adventurous,

I spoke with my guide yesterday and if my experience is typical, they are not particularly aware of the details of the tax credit. What I did find out however is that there is (at least in my case) a Preliminary Buyer's Agreement (PBA) already prepared in your Rivian account. All you need to do is ask the guide to send it to you, a process that takes only a mouse click to accomplish. It is an e-document, so "signed" by Rivian when sent and effective when you esign and date it.

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[Max]

Just got an email from Ford to get ready for the second round of Lightning orders. With no updated estimate from Rivian, it is safe to assume there is no chance of R1 delivery for me in 2022. And Ford is getting closer to their 200,000 if they have not hit it already. This illusive tax carrot makes life complicated.

 

[LoneStar]

IRS funding was purposely cut to the bone to hamstring their ability to audit and collect from those who don't pay the taxes ...

That's one helluva "bone" since IRS will be bigger than Dept. of Justice, FBI and ICE ... combined!

 

[RoadRunner]

That's one helluva "bone" since IRS will be bigger than Dept. of Justice, FBI and ICE ... combined!

The IRS is CURRENTLY way underfunded and is not able to collect billions of tax dollars as a result. It was cut to the bone by the previous administration. This bill attempts to correct that by increasing their funding, which should more than pay for itself via increased collection of taxes that are owed under current law.

https://www.cbpp.org/research/federal-tax/the-need-to-rebuild-the-depleted-irs

 

[electruck]

And Ford is getting closer to their 200,000 if they have not hit it already.

Not even close. According to this article, they had only sold 2296 Lightening as of July 5th and other Google sources indicate they were only targeting 15k units for 2022.

 

[aex90832]

Not even close. According to this article, they had only sold 2296 Lightening as of July 5th and other Google sources indicate they were only targeting 15k units for 2022.

I think he's referencing the total number of vehicles sold by Ford that can claim the EV credit under current law before the sunsetting. They've sold a ton of Mach-E.

 

[electruck]

I think he's referencing the total number of vehicles sold by Ford that can claim the EV credit under current law before the sunsetting. They've sold a ton of Mach-E.

Misread that, thanks!

 

[AxelR]

I spoke with my guide yesterday and if my experience is typical, they are not particularly aware of the details of the tax credit. What I did find out however is that there is (at least in my case) a Preliminary Buyer's Agreement (PBA) already prepared in your Rivian account. All you need to do is ask the guide to send it to you, a process that takes only a mouse click to accomplish. It is an e-document, so "signed" by Rivian when sent and effective when you esign and date it.

So, your guide was able to send you this?
Did you have to lock your configuration?

 

[JayinNJ]

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??

No you are not understanding how tax credits currently work.

 

[Husker Charlie]

So the bill providing for this EV tax incentive is the same one hiring stupid amounts of IRS agents to maximize the government's revenue... What could go wrong?

And to answer the question of who is paying for all of this? Probably China. We're borrowing money to pay for it because we don't have it.

It's a tax credit, not a rebate. Therefore, a person only gets the credit if s/he owes money in taxes, and the individual taxpayer is only getting a tax break (i.e., paying $7500 less in taxes). If I have a $20000 tax liability, I only have to actually pay $12500. If I only owe $5000 in taxes, I use the tax credit and pay $0 - but I don't get a "refund" of the unused $2500.

In other words, instead of me paying $7500 to the government in taxes, the government is letting me pay that money to Rivian. Viewed in still another way, it's a direct tax allocation - instead of me giving $7500 to the government and letting the government decide how my tax money is spent, the government is letting me choose how to spend my taxes.

 

[RoadRunner]

My point is that the bill is vague in respect to how the IRS will determine certain aspects of the EV tax credit while also telling the IRS to bring in as much money as possible. Definitely conflicting ideas in my opinion. The EV credit will increase our debt and someone will be paying for it. Just because you lump it in with tax collections doesn't change that fact.

Collecting as much tax money as possible (ie minimizing tax avoidance and fraud via audits and enforcement), and spending some of that money to further EV adoption are actually not conflicting ideas. The whole point of collecting taxes is to supply the money to spend on whatever you think is a priority. If you don't think EV tax credits should be a priority that's fine, I guess...but either way we still need to collect taxes.

 

[Yossarian]

So, your guide was able to send you this?
Did you have to lock your configuration?

Yes, my guide sent the PBA to me, literally a few seconds after I asked for it. The agreement lists what you have configured, and it commits you to the purchase, so yes you are technically locked into what the PBA says after signing.

I would expect that you will be given some flexibility regarding configuration however, and should be able to add options, or change the paint color for example. That's been the case for purchasers so far, but it's ultimately Rivian's call as to whether they'll continue that practice. I think the odds are good however, as it's relatively easy for Rivian to accommodate most changes and usually results in more revenue.

 

[Acoustic71]

It's a tax credit, not a rebate. Therefore, a person only gets the credit if s/he owes money in taxes, and the individual taxpayer is only getting a tax break (i.e., paying $7500 less in taxes). If I have a $20000 tax liability, I only have to actually pay $12500. If I only owe $5000 in taxes, I use the tax credit and pay $0 - but I don't get a "refund" of the unused $2500.

In other words, instead of me paying $7500 to the government in taxes, the government is letting me pay that money to Rivian. Viewed in still another way, it's a direct tax allocation - instead of me giving $7500 to the government and letting the government decide how my tax money is spent, the government is letting me choose how to spend my taxes.

I have posted this elsewhere but in the interest of sanity I will post it again, hopefully with more clarity.

As per the current regulations, here's link to the form that should answer most of the questions forum members are asking. Fill it out, based on your last year's return or estimated return for this year, and you may find some surprising answers.

IRS Form 8936

 

[Dark-Fx]

My point is that the bill is vague in respect to how the IRS will determine certain aspects of the EV tax credit while also telling the IRS to bring in as much money as possible. Definitely conflicting ideas in my opinion. The EV credit will increase our debt and someone will be paying for it. Just because you lump it in with tax collections doesn't change that fact.

I'm good with them increasing my taxes enough to pay for the $7500 EV credit for everyone who qualifies.

Just got an email from Ford to get ready for the second round of Lightning orders. With no updated estimate from Rivian, it is safe to assume there is no chance of R1 delivery for me in 2022. And Ford is getting closer to their 200,000 if they have not hit it already. This illusive tax carrot makes life complicated.

At this point, it doesn't matter. If they hit 200k this quarter, next quarter is still the full $7500 rebate. The quarter after that, the new law will take effect. (Assuming it actually passes)

 

[Longreach]

Just got an email from Ford to get ready for the second round of Lightning orders. With no updated estimate from Rivian, it is safe to assume there is no chance of R1 delivery for me in 2022. And Ford is getting closer to their 200,000 if they have not hit it already. This illusive tax carrot makes life complicated.

Don’t forget the credit phaseout starts in the quarter AFTER reaching that cap. Most Ford customers will have credit continuity if they do reach the cap before year end, other than the income and price limits.

The new program seems almost tailor made for the Ford case (just coincidence).

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