A specter is haunting the American EV market: The specter of the Inflation Reduction Act. It contains a wealth of initiatives, from healthcare pricing to climate action, but automaker and car buyers are both eyeing its affects on the $7,500 EV tax credit. The bill limits the credit to vehicles built in North America, and next year will begin making restrictions based on MSRP, buyer income, and battery construction.
For Rivian, those restrictions are a problem — its vehicles start expensive and option up quickly. With delivery times stretching into next year, the company risks losing customers when their discount dries up. But, in the face of legislation, it seems like Rivian has found a loophole.
An email sent to Rivian reservation holders gives them an option — making a portion of their deposit non-refundable, and making the purchase contract binding. The company’s support page also lists the option, for any reservation holders who may not have gotten the initial email. That would allow buyers to still take the current flat $7,500 credit, no matter when their vehicle ends up rolling off the assembly line, thanks to a “transition rule” written into the law:
(l) TRANSITION RULE.—Solely for purposes of the application of section 30D of the Internal Revenue Code of 1986, in the case of a taxpayer that—
(1) after December 31, 2021, and before the date of enactment of this Act, purchased, or entered into a written binding contract to purchase, a new qualified plug-in electric drive motor vehicle (as defined in section 30D(d)(1) of the Internal Revenue Code of1986, as in effect on the day before the date of enactment of this Act), and
(2) placed such vehicle in service on or after the date of enactment of this Act,
such taxpayer may elect (at such time, and in such form 1and manner, as the Secretary of the Treasury, or the Secretary’s delegate, may prescribe) to treat such vehicle as having been placed in service on the day before the date of enactment of this Act.
The Inflation Reduction Act specifically allows methods like this, signing a binding agreement in 2022 that saves your tax credit for years to come. But there’s a hitch — the contract has to be signed in 2022, and before the bill passes the President’s desk.
That doesn’t leave prospective buyers much time — while the bill hasn’t yet passed the House of Representatives, a prerequisite for making its way to the White House, that’s likely to happen this week. If interested buyers want to save that credit, they’ll need to place non-refundable money down in the next few days.
Jalopnik reached out to Rivian for comment, but didn’t hear back by press time.