Rivian (RIVN) is not happy to be excluded from the new tax credit for electric vehicles
Rivian (RIVN) commented on the new federal electric vehicle tax that is expected to pass, and the US automaker said it was not happy to be left out of the new incentive.
Last week, the US Senate reached an agreement on reforming the federal electric vehicle tax credit. It looks like it could finally happen after about two years of work, though it’s still pending a vote.
The new $7,500 incentive comes with numerous new vehicle eligibility requirements, including new price limits, which appear to exclude Rivian’s electric vehicles from the incentive. Price limits are “$80,000 for zero-emission vans, SUVs and trucks,” as well as $55,000 for electric sedans.
Technically, Rivian’s starting prices are under $80,000, but the automaker doesn’t expect to deliver these lower-priced versions for a few years. In addition to the price limit, the incentive is also only available to individuals reporting adjusted gross income of $150,000 or less, $300,000 for co-filers.
In an interview with Automotive News, Rivian’s Vice President of Public Policy, James Chen, confirmed that the company believes most of its vehicles will not be eligible:
As a result, “almost all of our vehicles would not be eligible for incentives,” Chen said. The company doesn’t even plan to offer a cheaper model until 2025, he said.
The executive argued that this put the company at a disadvantage:
In a statement and interview, James Chen, Rivian’s vice president of public policy, said the pending climate change bill, the result of a political agreement between Senate Majority Leader Chuck Schumer and Sen. Joe Manchin, DW.Va., would give most of the breaks to other producers like Tesla and General Motors that have had more time to ramp up production or do overseas manufacturing.
Rivian calls for extending the incentive to apply to its vehicles:
The final package must extend the transition period to provide consumer choice and protect well-paying manufacturing jobs here at home.
The new electric vehicle tax credit reform proposal is not yet in effect, but it is the closest to becoming law since the reform effort began two years ago.
I understand it’s frustrating for Rivian, but it’s more about timing than being deliberately left out – even though we discussed on the podcast last week that Ford and GM clearly had a strong hand in crafting of new legislation.
Rivian did the right thing and started the market, and it will be a few years before they can deliver low-cost vehicles. The US electric vehicle incentive was the only one from a major country that didn’t include some sort of limit to avoid giving subsidies to the very wealthy. I think this is a correct setting.
Unfortunately for Rivian, the timing causes it to be left out, but I don’t understand the argument that it puts it at a disadvantage compared to its competitor because competitors at the same price point won’t have access to it either.
EV automakers that have cheaper options will get them and they’re not really competitors, are they?
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