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Update 8/16 from IRS: 2022 purchases are eligible under old tax credit

sevengroove

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Update 8/16
From IRS' guidance today on the new EV credit, confirming Electrek's take:
Vehicles Purchased and Delivered between August 16, 2022 and December 31, 2022
If you purchase and take possession of a qualifying electric vehicle after August 16, 2022 and before January 1, 2023, aside from the final assembly requirement, the rules in effect before the enactment of the Inflation Reduction Act for the EV credit apply (including those involving the manufacturing caps on vehicles sold). If you entered into a written binding contract to purchase a new qualifying vehicle before August 16, 2022, see the rule above.

New Final Assembly Requirement
If you are interested in claiming the tax credit available under section 30D (EV credit) for purchasing a new electric vehicle after August 16, 2022 (which is the date that the Inflation Reduction Act of 2022 was enacted), a tax credit is generally available only for qualifying electric vehicles for which final assembly occurred in North America (final assembly requirement).

Found this helpful summary on electrek on what the new bill means especially for 2022 orders and deliveries (first bullet):
https://electrek.co/2022/08/07/senate-improves-ev-tax-credit-in-largest-climate-bill-ever/
  • If you’re buying an electric vehicle this year that qualifies for the current credit, you’ll get the credit.
  • If you sign a purchase order this week and have to wait until next year for delivery of a car that won’t qualify for the new credit (e.g. a foreign-manufactured EV), you can still qualify for the current credit.
  • If you’re buying a car that doesn’t qualify for the current credit, you may get the new credit by waiting until next year, depending on if the car qualifies under the domestic manufacturing rules above.
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fbitz777

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Yes that is how I read it too.

Issue is if Rivian fails to deliver your 2022 expected EV then you could be out of luck (income or msrp limits)
 

Jac

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Yes that is how I read it too.

Issue is if Rivian fails to deliver your 2022 expected EV then you could be out of luck (income or msrp limits)
Exactly. Also, we don’t know if the new battery mineral sourcing and battery component source rules will eliminate any rebate eligibility for Rivian starting January 1. Getting a signed binding purchase agreement completed this week before the President signs the new law avoids all these problems if our Rivian is delivered in 2023.
 

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Exactly. Also, we don’t know if the new battery mineral sourcing and battery component source rules will eliminate any rebate eligibility for Rivian starting January 1. Getting a signed binding purchase agreement completed this week before the President signs the new law avoids all these problems if our Rivian is delivered in 2023.
This
 

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if anyone from Rivian is following these threads please make a compliant purchase agreement available.
 

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Exactly. Also, we don’t know if the new battery mineral sourcing and battery component source rules will eliminate any rebate eligibility for Rivian starting January 1. Getting a signed binding purchase agreement completed this week before the President signs the new law avoids all these problems if our Rivian is delivered in 2023.
I believe the sourcing rules take effect in 2024 unless I read something wrong. So all manufacturers have a year to figure out where their battery materials come from LOL.
 
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Bigeasy70075

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Just saw a video about fisker changing there website to allow its order holder to enter into a binding order by making their deposit non refundable
 
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I think this summary is misleading. If you don't purchase a vehicle in 2022 before Biden signs the legislation, you are not eligible for the $7,500 credit under the old rules.

The Electrek summary makes it sound like if you buy an R1T any time in 2022 you are covered - that is not how I interpret the changes.

In order for you to qualify for the old 7,500 credit without income/price restrictions you must:
  1. Have already purchased and received delivery of an EV in 2022 prior to the enactment of the legislation
  2. Have a binding purchase agreement for an EV signed BEFORE the legislation is signed by the president that you will take delivery of in 2022 or 2023.
 
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electruck

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I believe the sourcing rules take effect in 2024 unless I read something wrong. So all manufacturers have a year to figure out where their battery materials come from LOL.
You might want to read it again:
Rivian R1T R1S Update 8/16 from IRS: 2022 purchases are eligible under old tax credit ira_ev_min-
 

Jac

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I believe the sourcing rules take effect in 2024 unless I read something wrong. So all manufacturers have a year to figure out where their battery materials come from LOL.
I don’t have the energy to look this up tonight but maybe someone else can - I think battery mineral sourcing and battery component source requirements do begin in 2023 but there was another provision that some amount of China sourced stuff could remain until ‘24. I could be misremembering this stuff so I invite someone to check a reliable source.
 

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I signed my pre-purchase agreement with Rivian in April when I thought I was just about to get my R1S. It sounds like that puts me under the current rebate program as long as I get my car this year or next right? I'm back within my delivery window so fingers crossed it'll be in the next 2 months
 

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You might want to read it again:
ira_ev_min-png.png
That’s essentially the same thing I was saying And the same thing the manufacturers are saying. That a year is not enough time to adapt to the rule. Some are not even sure where all the materials in their batteries come from.

Automakers are concerned that the sourcing targets outlined in the proposal are too high and they rise too quickly. General Motors said specifically that the targets will present a challenge, and they're not something that can be achieved quickly. Beginning in 2024, the bill would withhold an EV tax credit from any car with battery components from China.
https://insideevs.com/news/602477/automakers-suggest-changes-ev-tax-credit-proposal/
 
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sevengroove

sevengroove

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In order for you to qualify for the old 7,500 credit without income/price restrictions you must:
  1. Have already purchased and received delivery of an EV in 2022
  2. Have a binding purchase agreement for an EV signed BEFORE the legislation is signed by the president that you will take delivery of in 2022 or 2023.
Well, shit. If electrek is wrong about this I’ll delete this thread. It’s frustrating to see so many different and incorrect interpretations of the rules being posted as articles. Leave the speculation to the forums 😆.

sure seems like a PBA is the failsafe we all need regardless of 2022 or 2023 orders.
 

electruck

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That’s essentially the same thing I was saying And the same thing the manufacturers are saying. That a year is not enough time to adapt to the rule. Some are not even sure where all the materials in their batteries come from.


https://insideevs.com/news/602477/automakers-suggest-changes-ev-tax-credit-proposal/
You're saying a couple of different things, I was only responding to when the sourcing rules kick in which is before 2024 (not starting in 2024).

Agree that manufacturers can't shift supply chains quickly enough to maintain eligibility but that's where it will be interesting to see if the government starts granting waivers. I won't hold my breath.
 
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Jac

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You might want to read it again:
ira_ev_min-png.png
Yeah, this is just part of the text, but I think I think I recall the proposed battery source guidance is supposed to be done by around the end of this year (2022) and this says on lines 20-24 that the 40% requirement applies from that point until, Jan. 1, 2024. Pretty clear the 40% applies during 2023 - unless you complete a binding sales contract this coming week before the new EV law is enacted.
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