Tax Credit Changes in new bill [LOCKED DUE TO POLITICS & ARGUING]

[RoadRunner]

Rivian may well do something like this - I'm guessing that all options are on the table but they are waiting until the bill is finalized and passed before deciding how to react to it. And they are probably still lobbying to get it changed.

I emailed customer service yesterday morning about this issue, and this is part of the response they sent:

"The R1T and R1S currently qualify for the IRC “30D” federal tax credit. Possible new federal tax incentives for electric vehicles are still being negotiated for inclusion in a reconciliation bill. While we can’t speculate on future tax credit eligibility, we will provide updates as to how new laws will affect Rivian customers once the new legislation is passed."

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[Friscorays]

Rivian may well do something like this - I'm guessing that all options are on the table but they are waiting until the bill is finalized and passed before deciding how to react to it. And they are probably still lobbying to get it changed.....

Problem is there won't be more than a few days between presumed passage and President Biden signing bill into law at which time my understanding is that those without a purchase agreement are out of luck. I really hope that Rivian is on the ball with this and that they actually plan on a substantive response which will be helpful to their customers but I admit to being pretty doubtful.

 

[RoadRunner]

Friscorays - good point, the timing on this thing just sucks. Hoping they extend the current credits to include delivery in 2023 before it passes. There just isn't enough time for manufacturers to react the way it is currently written.

 

[Donald Stanfield]

Problem is there won't be more than a few days between presumed passage and President Biden signing bill into law at which time my understanding is that those without a purchase agreement are out of luck. I really hope that Rivian is on the ball with this and that they actually plan on a substantive response which will be helpful to their customers but I admit to being pretty doubtful.

From what I understand they wouldn't be out of luck if they took delivery this year still. What worries me is what this means for Rivian as a company. While the tax credit would suck to lose for me it isn't a deal breaker. What is would be Rivian folding due to massively decreased demand because others cannot get the tax credit. I wouldn't want to buy a truck from a manufacturer that doesn't exist, so much for getting support.

That is the part that worries me and causes hesitation even though my truck is currently being built.

 

[Friscorays]

From what I understand they wouldn't be out of luck if they took delivery this year still....

That is correct. There will be no problem for anybody reasonably expecting delivery of a Rivian this year. I'm after an R1S so as far as I am concerned, there is no chance of delivery this year happening.

 

[zipzag]

https://www.voltequity.com/post/new-ev-tax-credits-for-tesla-in-2022

https://www.congress.gov/bill/117th-congress/house-bill/5376/text

 

[Donald Stanfield]

https://www.voltequity.com/post/new-ev-tax-credits-for-tesla-in-2022

https://www.congress.gov/bill/117th-congress/house-bill/5376/text

Well it looks like they upped the income caps. That will help out most people, and families making over 500K per year can buy the cars regardless. I'm still glad I'm getting mine this year, but this bill doesn't sound too bad honestly. More credits and positive encouragement to continue making EV's.

 

[zipzag]

Well it looks like they upped the income caps. That will help out most people, and families making over 500K per year can buy the cars regardless. I'm still glad I'm getting mine this year, but this bill doesn't sound too bad honestly. More credits and positive encouragement to continue making EV's.

Looks like the $80K MSRP limit is holding, so the bill still sucks for Rivian.

I guess I will need to decide how much I want max pack.

 

[TXR1S]

https://www.voltequity.com/post/new-ev-tax-credits-for-tesla-in-2022

https://www.congress.gov/bill/117th-congress/house-bill/5376/text

interesting. They are literally the first ones reporting this. Will be very interesting to see if accurate, but does seem plausible.

edit: the author of the volt equity article is totally wrong and very misinformed.

 

[RoadRunner]

Looks like some positive changes here - Rivian (and Tesla, Fisker, Audi, VW etc) would still be eligible for $7500 credit if I'm reading this right (if MSRP below 80K - gives Rivain some incentive not to raise prices).

Unionized labor+US assembly would add another $4500 for Ford and GM. Plus another $500 for any EV with batteries made in the US.

 

[Donald Stanfield]

Looks like the $80K MSRP limit is holding, so the bill still sucks for Rivian.

I guess I will need to decide how much I want max pack.

For sure, but I think that's good for us as consumers long term. EVs are priced at a point where there cannot be widespread adoption. This will force manufacturers to keep models within reach of consumers which increases the amount of people who will adopt them. Options like the max pack or quad motor setup can still be purchased, but you'll be paying a premium for them.

I expect manufacturers to respond to these incentives in the coming years but reducing costs of EV's which is the point of this bill. Without the vehicle pricing caps Manufacturers could just raise the price of EV's and in essence be the ones reaping the benefits of the tax credits instead of the consumer which is the intended point of the credit.

 

[zipzag]

interesting. They are literally the first ones reporting this. Will be very interesting to see if accurate, but does seem plausible.

Yes, the author is a lawyer and pointed at the new bill revision released yesterday when challenged on twitter. I'm not going to read the bill, but he does seem credible.

 

[Rob Stark]

interesting. They are literally the first ones reporting this. Will be very interesting to see if accurate, but does seem plausible.

This is referencing the old House bill from last year.

Not the current Schumer-Manchin compromise.

 

[TXR1S]

This is referencing the old House bill from last year.

Not the current Schumer-Manchin compromise.

I believe this author is claiming the EV tax credits from the old bill are being put into the Schumer manchin compromise bill.

Edit: it looks extremely likely this author is completely wrong.

 

[DJG]

I thought we were done with this thought - I guess not. So my last response to your statement herein is this:

As a long time TSLA stock (since IPO) and Model 3 owner, I have seen Tesla raise and LOWER prices multiple times. Each time had nothing to do with Tax incentives. It had everything to do with their cost basis and maintaining their margins (I actually read 10K filings). Tesla is on record from the last earnings call that they hope to lower the vehicle prices once the inflation settles down and commodities come down. I believe them, given their track record.

The reason all mfgs want the EV incentive is because it does stimulate demand in general and in case of GM Nissan, Toyota and Tesla to lesser case, wants a level playing field. This is one of the reasons why I believe the government should get out of their way and get rid of incentives at the retail end.

You do have a point. And that is that the legacy mfgs does benefit by incentives on their low end EVs. Unlike Tesla, where the gross margin is above 25%, legacy ICE run in single to low double digits. The low end slim margins are being helped by being able to price Bolt and Leaf and alike at a higher price than they would sell otherwise. This is not the case for Hummer or Mustang EV. Still, their profits are made from ICE vehicle sales, not EVs. So rather than putting EV incentives, government should put Carbon Tax on vehicle buyers, if they are serious about EV transition (never will happen anytime soon).

So if you think not agreeing with your perspective on this is being naive, then fine. Like I said before, we disagree and that's okay.

I never suggested not agreeing with my perspective was naive, that would be naive. I said that thinking that OEMs would lobby for legislative changes that only benefitted customers and not themselves would be naive.

Seems as though you came around to my point, that the incentives stimulate both supply and demand in the meat of the demand pool ("affordable vehicles"). None of this really augments market dynamics at the high end of the market, as that's not what this is about really. Rivian will sell all the R1's they need to with or without a tax credit (If Tesla can sell an equivalent number of S/X's at higher prices Rivian can do it in their sleep with R1's), but $7,500 on an R2 could be the difference in them succeeding or not.

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