Here's How Rivian is Handling the IRA 2022 EV Tax Credit Uncertainty

[Amps]

I'm still convinced that for all F150L's and probably Rivians delivered on or before 12/31/2022, we're using the "old" rules.

Do you think Rivian is converting contracts to 'binding' before 'enactment' just to placate their customers?

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[Simpso57]

Do you think Rivian is converting contracts to 'binding' before 'enactment' just to placate their customers?

No, Tyler and Rivian are both right. The bill says, in short, if you take delivery of a Lightning or Rivian in 2022, you will be under the old credit (with one possible exception). However, if you have a current non-binding order (which is what Ford and Rivian do) but do not take delivery before January 1, 2023, then the new rules apply. Thus, Rivian (and other manufacturers) are converting refundable deposits into non-refundable deposits to take advantage of the Transition rule. That will result in applying the old credit to those taking delivery after 1/1/23 because they have a binding purchase agreement.

 

[ExCivilian]

Your bullet point #3 seems to conflict with Rivian's guidance to obtain a binding contract to maintain grandfathering.

Yes, I can see how it would appear like we're saying two different things.

It's true that once the bill is signed it's officially "enacted," but what that means exactly is a bit more convoluted than concluding the next second all the pieces of the legislation come to fruition. Enacted literally means to make something into a law; when the US President signs a bill into law it's, by definition, "enacted."

Now, however, we live in too complex of a society to let laws just sit like that and be. They have to be interpreted by many (unelected) bodies who then issue guidance and policy on how that law interfaces with society. Without those, even the people who drafted the bill wouldn't understand how it's supposed to play out day to day.

All that is to say that once a law is "enacted" it's a law, sure, but it still needs to go through this meat grinder before we all know what that law means to us. It also means, and this is something I try to impress upon my incoming students each year in my public policy and social control courses, that a slew of unelected officials effectively control our bodies while we pay attention to relatively inconsequential laws crafted by Congress and ruled upon by SCOTUS. Meanwhile, the very air that we breath, the water we drink, the food we eat, the drugs we ingest, the media we consume, and even this very discussion we're having on the internet is all governed by unelected officials in the EPA, the FDA, and the FCC/FTC, among other agencies.

Back to Rivian, though, and how I could say that I agree with their interpretation while not agreeing with the member's I quoted, I would say that Rivian correctly points out the law will be created upon Biden signing the bill and that they don't know what that means for their customers. In an abundance of caution, they are offering a way for customers to enter into binding sales contracts to ensure they can claim the 2022 rules for their upcoming deliveries. But that's not the same as saying they have to sign it because no one knows that to be true, yet. This bill isn't even ready to become law because it still has to go back through the House.

I suggest that Rivian's statement should be taken as the most conservative approach to secure one's tax benefits. Customers may not need it but at least they'll have it if they do and there are no negative consequences (other than potentially losing the $100).

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