Last week, the US Senate reached an agreement on reforming the federal tax credit for electric cars. It looks like it might finally happen after nearly two years in the making, though he’s still pending a vote.
The new $7,500 Incentive comes with a lot of new car eligibility requirements — including new price limits — that look like they’d prize Rivian electric cars from the Incentive. Price limits are “$80,000 for zero-emissions trucks, SUVs, and vans,” plus $55,000 for electric sedans.
Technically, the Rivian has starting prices below $80,000, but the automaker doesn’t plan to offer those cheaper versions for a few years. On top of the price cap, the incentive is also only available to individuals who report an adjusted gross income of $150,000 or less, $300,000 for subscribers.
In an interview with Automotive News, Rivian’s vice president of public policy, James Chen, confirmed that the company believes most of its cars will not qualify:
As a result, “nearly all of our cars will be ineligible for incentives,” Chen said. He said that the company does not even plan to offer a lower-priced model until 2025.
The CEO argued that it puts the company at a disadvantage:
In a statement and interview, James Chen, Vice President of Public Policy at Rivian, said the pending climate change bill, the result of a political agreement between Senate Majority Leader Chuck Schumer and Senator Joe Manchin, D. Most of the breaks are for other producers like Tesla and General Motors who have more time to ramp up production or do some overseas manufacturing.
Rivian claims to expand the incentive to apply it to its vehicles:
The final package should extend the transition period to provide consumer choice and protect well-paid manufacturing jobs here at home.
The proposed new reform of the electric vehicle tax credit is not yet a law, but it is the closest thing to becoming law since efforts to reform it began two years ago.
I understand it’s frustrating for Rivian, but it’s more a matter of timing than intentionally left out — although we discussed in our podcast last week that Ford and GM had a strong hand in crafting the new legislation.
Rivian did the right thing and started the market, and it will be a few years before you can offer low priced cars. The incentive for American electric cars was the only one from a major country that didn’t include some sort of restriction to avoid subsidies for the very wealthy. I think it’s a correct edit.
Unfortunately for Rivian, timing results in its exclusion, but I don’t understand the argument that it puts it at a disadvantage to its competitor because competitors at the same price level won’t have access to it either.
Electric car makers with cheaper options will get it and those aren’t really competitive, are they?
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