If you want an EV, buy this week – Rivian, Fisker and others rush to lock in EV tax credits before

Rivian, Fisker, and other EV makers are offering binding purchase agreements to reservation holders after the Senate passed the Inflation Reduction Act with big EV tax credit changes. The availability of tax credits could change within the span of the next week if the House passes the bill and President Biden signs it quickly as is expected.

If you’re looking to buy an EV soon, check below to see how various manufacturers will be affected by these changes, and what you can do to try to ensure access.

While the bill improves the EV tax credit in many ways, including making it available at the point of sale and removing the 200k credit cap per manufacturer, there are some confusing changes that have caused a rush within the EV community to try to take advantage of the credits before they go away.

At issue is a provision that states the new credit is only available to EVs that go through final assembly in North America – intended to encourage onshoring of manufacturing. Unlike other aspects of the new tax credit which mostly start at the beginning of 2023 (elimination of 200k cap per automaker, adoption of MSRP and income limitations) or 2024 (battery component and mineral sourcing requirements), the assembly requirement goes into place immediately upon enactment of the law.

But the law includes a “transition rule” which states any EV with a “written binding contract to purchase” signed before the date of the law’s enactment will be able to take the old credit if the buyer so chooses, even if the car is delivered after the bill is signed

(Note: this means that binding purchase agreements signed today can, if the buyer chooses, treat the credit as if you bought the car today, with all of the current rules for the “old” credit – you can’t mix and match certain rules, you either get all the provisions of the old one or the new one)

Because of this, some EV manufacturers are offering binding purchase agreements to lock in credit availability for cars that are assembled outside North America or which run afoul of the new bill’s price cap.

Here’s our best understanding of the situation, broken down for each manufacturer that is likely to be at least partially negatively affected (i.e., not counting Ford, which is US-based, and GM and Tesla, which can only benefit since they’re currently out of credits anyway, etc.). We’re mostly focusing on BEV models here, but have mentioned a few PHEVs as well.

Fisker tax credits

The upcoming Fisker Ocean should start deliveries by the end of this year, but since it’s assembled in Austria by Magna, it will lose access to EV tax credits as soon as the new bill is enacted.

Fisker put out a press release inviting reservation holders to convert their $250/$100 reservation fees to non-refundable orders. This won’t cost anything, but it does make your reservation fee non-refundable. Get in touch with your Fisker contact now if you have a reservation but still want access to the tax credit.

Rivian tax credits

Rivian should have an easier time of it than Fisker, given that its vehicles are assembled in the US, and therefore will not be disqualified the moment the bill is enacted. But some configurations of Rivian’s trucks do fall afoul of the price caps, which the bill sets at $80k for trucks and SUVs, which is further complicated by Rivian’s price hike and subsequent reversal for early orders.

Unlike the North American assembly provision, the bill’s price caps don’t go into effect immediately; instead, as best we can tell, they go into effect at the beginning of next year. At that point, any Rivian over $80k will no longer qualify for the credit (which Rivian isn’t happy about).

But regardless of this, the transition rule triggers as soon as the bill is signed, so you should still attempt to convert to a binding reservation ASAP if you think you might end up in one of the bill’s edge cases next year (e.g. taking delivery of an 80k+ Rivian next year, or if you have income over 150k single/300k jointly).

Update: Rivian is sending out emails to customers today, so check your email if you have a Rivian reservation (here’s a copy of the email). It also posted a support response on its website. In short, customers can convert $100 worth of their reservation into a non-refundable binding reservation fee on request.

Lucid tax credits

Lucid is in a similar situation as Rivian, in that the cars are assembled in the US and currently ramping up in production, but it runs afoul of the bill’s $55k price cap for cars. As a result, Lucid buyers will lose access to the EV tax credit when the price caps go into place, but not immediately when the bill is signed. Lucid has a little longer to figure things out than some other automakers on this list, but we hope to hear back from then before the end of the year.

Polestar tax credits

The Polestar 3 will be manufactured in the USA, but the all-electric Polestar 2 is not. As a result, the Polestar 2 will lose access to EV tax credits, but the Polestar 3 might qualify when it hits the road in the future, depending on if it stays under the $80k SUV price cap and sources its batteries properly.

We reached out to Polestar and got this response:

Polestar is closely monitoring the developments in the United States Congress regarding changes to the Electric Vehicle Tax credit. We will have more information to share if and when the proposed legislation passes through the House of Representatives.

Polestar added that the reason for its delay is that it wants to be completely certain that it can deliver on any promises it makes to customers, and currently due to the developing nature of the bill and the public’s understanding of it, it is not fully confident in that.

Unfortunately, this approach means that Polestar will have even less time to react if and when the House passes the bill and before Biden signs it, which could happen in a matter of days. So for Polestar buyers who are waiting for a car they configured to ship, be ready get in contact with Polestar or your dealer to try to figure out what to do, and hopefully Polestar will be able develop a process for this before the bill is signed. We’ll update this article if anything changes.

Polestar does have limited availability of pre-configured Polestar 2 vehicles for purchase at its dealerships, which are sparsely distributed throughout the nation. You can also try to get one from an independent dealer, because a few have been available at non-Polestar dealers.

Hyundai tax credits

Hyundai’s Ioniq 5 is available right now, and buyers could conceivably find one at dealerships today, but stock is low and demand is high so some who have ordered are still waiting for their car to be delivered.

Hyundai is not happy to be left out of the new EV tax credit, and told us that they’re working with dealers and customers to try to offer a purchase agreement:

Hyundai has recently announced US investments of $10B including EV manufacturing in Alabama and Georgia. We are disappointed that the current legislation severely limits EV access and options for Americans and may dramatically slow the transition to sustainable mobility in this market. 

HMA and GMA are fully supporting our dealers to assist consumers with accessing the currently available tax credit through appropriate processes and purchase agreements.

If you have an Ioniq 5 on order, reach out to your dealer to see if you can get a purchase agreement signed. If you want an Ioniq 5, check your local dealer inventory, and if you’re lucky enough to find one, see if you can buy within the week.

Genesis tax credits

Since Genesis is Hyundai’s luxury brand, it offered the same statement as Hyundai above. The Genesis GV60 has recently started deliveries in the US, but it’s still selling in relatively low numbers so far.

That said, there seem to be several GV60s in stock on Genesis’ website, so check your local dealer inventory, and you might be able to find one available for purchase right away.

Kia tax credits

Kia is in a similar situation as Hyundai, with the EV6 on the road but still available in low numbers due to high demand and low supply.

We didn’t hear back from Kia by press time, but since Kia and Hyundai are closely related companies, we hope its reaction and processes will be similar and that it is talking with its dealers about solutions now. Reach out to your dealer if you have one on order.

If you want an EV6 and don’t have one on order yet, check your local dealer inventory and if you find one, see if you can buy within the week.

VW tax credits

The VW ID.4 is an interesting case, because it’s already out in numbers here in the US, but we’ve heard from several readers that some cars are being shipped to the US right now, with owners waiting for delivery. Anyone in that situation should make sure they have a binding purchase agreement signed with their dealer, especially if delivery is imminent.

But this is only relevant for this model year, because the 2023 ID.4 will be built in the US at VW’s Chattanooga, TN plant. So, really, the only people in danger of losing EV tax credits on the ID.4 are those who are currently waiting on a 2022 model to ship from Germany.

That said, the 2023 ID.4 gets some new features and a small price hike (along with a lower base price due to a new smaller battery option), so if you want the 2022 model without those new features and with the larger battery, check your local dealer inventory for a 2022 ID.4 and buy this week.

Nissan tax credits

Nissan’s upcoming Ariya is being assembled in Japan, but isn’t being sold in the US yet. Further, the company is very close to hitting the 200k cap on the “old” EV tax credit.

This leads to an interesting situation where buyers signing a binding purchase agreement today could conceivably still qualify for the “old” tax credit when they take delivery of an Ariya, but only if that delivery takes…

Read More: If you want an EV, buy this week – Rivian, Fisker and others rush to lock in EV tax credits before

2022-08-10 12:16:00

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