Rivian pledged to help its customers who ordered R1S or R1T claim their $7,500 tax credit, despite neither vehicle being eligible for the new Inflation Reduction Act (IRA) regulations.
Manufacturers had to figure out how to pass the IRA regulation from August until 31 December 2022, although the IRS has yet to publish the final EV tax credit guidelines. As a result, the incentives for some manufacturers went out the window on New Year’s Eve.
The best solution the manufacturers could devise was to have a binding agreement with their clients before 2023. For Rivian, only customers who entered a binding agreement before 16 August 2022 might qualify for a federal tax credit.
Rivian required their customers to pay a $100 non-refundable deposit, which the IRS disputes.
See: Department of Treasury Offers Federal Tax Credit of Up to $7,500 for Buying Electric Vehicle
The IRS has a different opinion on what a binding agreement is. According to the agency, the indication of a binding contract is a “significant non-refundable down payment or deposit.” However, the word “significant” is extremely vague.
Before the IRA became law, a tax credit was given for every EV sold until the manufacturer hit 200,000 units. After the IRA was signed into law, stricter restrictions were set for the tax credit. It includes where a car is built, battery components and raw materials source, and household income.
Upgrading to R1T Large pack’s 328-mile range takes the electric truck above the new rule’s threshold. (Photo: Electrek)
The new rule has also set an $80,000 cap for SUVs and pickup. Meanwhile, a base R1S with the Standard pack and no options just slips under $79,800, destinations included. Only the entry-level R-1T with a 260-mile range and a standard battery pack can qualify. Upgrading it to the Large pack and adding a destination fee takes the electric truck above the threshold. The Large pack’s 328-mile range rules out the Standard pack’s 260-mile range; however, it has been delayed several times.
The IRA has also put startups like Lucid and Rivian in a challenging position. Under the old rule, Rivian’s customers could receive a decent tax credit until they built 200,000 units. But, the new legislation leaves Lucid and Rivian out in the cold.
Nevertheless, it’s nice of Rivian to help its customers get a tax credit and provide clear information and links to all necessary paperwork. Yet, whether their efforts will work remains to be seen.
Find Out: Revised Vehicle Classification Definition: More Electric Vehicles Eligible for Federal Tax Credit
