A specter haunts the US EV market: the specter of the Inflation Reduction Act. It contains a slew of initiatives, from health care pricing to climate action, but automakers and car buyers are both watching its effects on the $7,500 tax credit for electric vehicles. The bill limits the credit to vehicles built in North America, and next year will begin imposing restrictions based on MSRP, buyer’s income and battery build.
For Rivian, these restrictions are a problem – its vehicles start expensive and option quickly. With delivery times stretching into next year, the company risks losing customers when their discount dries up. But, faced with the legislation, it seems that Rivian has found a loophole.
An email sent to Rivian reservation holders gives them an option – to make part of their deposit non-refundable and to make the purchase contract binding. The company support page also lists the option, for any reservation holders who may not have received the initial email. That would be allow buyers can still take advantage of the current fixed credit of $7,500, no matter when their vehicle ends up rolling off the assembly line, thanks to a “transition rule” enshrined in law:
(l) TRANSITIONAL RULE.—Solely for the purposes of enforcing Section 30D of the Internal Revenue Code of 1986, in the case of a taxpayer who—
(1) after December 31, 2021 and before the date of enactment of this Act, purchased or entered into a binding written contract for the purchase of a new qualifying plug-in electric motor vehicle (as defined in Section 30D( (d)(1) of the Internal Revenue Code of 1986, as in force on the day preceding the date of enactment of this Act), and
(2) put such vehicle into service from the date of enactment of this Act,
such taxpayer may elect (at such time and in such form and manner as the Secretary of the Treasury, or the Secretary’s delegate, may direct) to treat such vehicle as having been put into service on the day before the date of enactment of this law.
The Reducing Inflation Act specifically allows methods like this, signing a binding agreement in 2022 that allows you to save your tax credit for years to come. But there’s a catch – the contract must be signed in 2022, and before the bill passes through the president’s office.
That doesn’t leave much time for potential buyers – although the bill has yet to pass the House of Representatives, a prerequisite for making it to the White House, it should happen this week. If interested buyers wish to save this credit, they will need to deposit non-refundable money within the next few days.
Jalopnik reached out to Rivian for comment, but did not hear back by press time.