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EV Tax credits and the Build Back Better bill

6K views 29 replies 14 participants last post by  RayzorBEV 
#1 ·
It appears the in the Build Back Better bill, customers of Rivian can only get a full tax credit if the assembly workers are unionized. This could mean over $4000 in additioinal price reduction of the vehicles. Does Rivian qualify as a Union shop?
 
#3 ·
As it stands now, the only available EV that qualifies is the Chevy Bolt EUV. The Ford Mustang EV is made in Mexico. Ford F150 Lightning would qualify when it is available. The government should not be picking winners & losers.

The starting pay and benefits for an assembly line worker at Rivian are comparable to Ford & GM, from what I can tell in online searches. And they don't have to pay union dues. There's not much incentive to organize a union at this point.

The Senate version of this bill doesn't include the union labor requirement. There are a number of Democrat Senators from states with with non-union auto manufacturers, including Illinois and W Virginia, that could influence the final bill. I hope they eliminate the union requirement and leave it at $4000 for US made.
 
#8 ·
The issue for me with the EV tax credit in the Build Back Better bill is the MSRP cap of $80,000, not whether it's $12,500 or subject to a $250k income level test.

I'm still on the fence about R1T vs R1S, but either way need the Max battery pack. The MSRP for the R1T with that option is roughly $83k and while the Max is not yet an option for the R1S, it will surely be well over that. The way the bill is written, it looks like the $80k restriction is an absolute limit, above which there is no credit. If that;s the case, no Rivian with the Max option will qualify.

While I'd really like move away from fossil fuel powered vehicles, I face some financial constraints in going to a BEV that become somewhat less restrictive with a tax credit. The $90,000 plus R1S Max (car plus tax) effectively becomes a $83,000 vehicle with a $7,500 tax credit. That's still quite a financial stretch for me, but with the other advantages of a BEV, probably tips the scales to the Rivian.

The situation is quite a bit different when the out-of-pocket costs are over $90k. I can get a very capable ICE vehicle (we are a one-car family and use our vehicle for everything from shopping trips to hauling our small camper on vacation excursions) for 75% of that value. While that ICE vehicle may not be the same earth-friendly alternative that an R1S is, it's much more comfortable financially.

There may be another EV alternative that is in the ICE vehicle range, the Tesla Cyber Truck. Though I don't really want a pickup, and the the CT is not presently eligible for the tax credit (that may change as the BBB evolves however) the MSRP for the Tri-motor, which will have a range that substantially exceeds that of the R1T Max, is under $70,000. As mentioned, I don't really want a pickup and frankly, I hate its looks, the CT may be the only affordable BEV alternative in my case should the Rivian not qualify for a substantial tax incentive.
 
#12 ·
I know the government’s intention in putting the $80,000 cap on price tag and $250,000 AGI cap is so as to not throw more tax benefits to high income earners who can afford the vehicle without the tax credit. I get the logic but it’s still bullshit. Every EV sale benefits the economy and everyone benefits from a growing economy so everyone who makes an EV purchase should receive the same tax credit, no sales price cap and no AGI cap since you don’t get any more tax credit by spending more. Spending more actually helps the economy more.
 
#9 ·
Problems with build back better bill for people wanting to buy Rivian:
1) household adjusted gross income limit: $250,000 for individuals and $500,000 for joint filers
2) MSRP of truck/SUV cannot exceed $80K
3) Gives more credit to vehicles that are " made by a unionized worker" - which rivian isn't.

All of these issues can cause a Rivian buyer not to get any/all of the tax credit. Lobby your senator about it.
 
#22 ·
If the people that are making more money are also paying more in taxes, and those same people are spending more money on a more expensive EV that is also good for the planet, and the government decides that they want to reward consumer behaviors, shouldn't those people spending more also get an incentive for the extra money they are contributing to the government in the form of more taxes to provide this incentive to everyone?

Of course, if it is a corporation working loopholes to avoid paying taxes, that is a different story entirely.

If someone is busting their ass to bring-in enough dough to afford a Rivian and there are incentives available to change the world, then there should be no issue getting an appropriate incentive, provided the same is true for those making less, potentially contributing less, but wishing to receive a commensurate incentive on a less expensive EV. I'm sure that logic is all too proportionate to make any sense.

I am buying a Rivian either with or without the incentives, but that doesn't mean the bill or tax credits are structured fairly or correctly, or that I wouldn't mind an incentive for being a good citizen and contributing to our economy - particularly when voting to buy US with my hard earned dollar$.
 
#24 ·
If the people that are making more money are also paying more in taxes, and those same people are spending more money on a more expensive EV that is also good for the planet, and the government decides that they want to reward consumer behaviors, shouldn't those people spending more also get an incentive for the extra money they are contributing to the government in the form of more taxes to provide this incentive to everyone?

Of course, if it is a corporation working loopholes to avoid paying taxes, that is a different story entirely.

If someone is busting their ass to bring-in enough dough to afford a Rivian and there are incentives available to change the world, then there should be no issue getting an appropriate incentive, provided the same is true for those making less, potentially contributing less, but wishing to receive a commensurate incentive on a less expensive EV. I'm sure that logic is all too proportionate to make any sense.

I am buying a Rivian either with or without the incentives, but that doesn't mean the bill or tax credits are structured fairly or correctly, or that I wouldn't mind an incentive for being a good citizen and contributing to our economy - particularly when voting to buy US with my hard earned dollar$.
People that make more money don’t always pay more taxes and can more easily hide/invest it and so on. It’s not a reward it should be to get as many EVs on the road as they can and make the EV an affordable option for as many as possible. Drawing a line and saying folks that make this much ($250k?) should be able to afford it will not be true for everyone at that income level. Some will still be putting more of their money elsewhere but I know someone that makes $35k a year will almost certainly not be able to. You are trying to make to pool of people that can afford an EV as big as possible not reward someone that already makes a ton of money.

Lots of folks bust their ass and get incredibly vastly different levels of income. Do you really want to go into the granular details of everyone’s life and see if their 40-60-80 hour work week should net them an annual salary of few million or $30k? Is it fare for someone that gets their car towed to lose weeks pay and someone else to lose a day, an hour or a few minutes of their paycheck? Do you want to go there? I’d love to.

Like 6 years ago now I got the Model S, no way was it a good business decision, but I was voting with my money and I always wanted an EV. I felt like EVs were the future sooner or later but sooner is better. Tons of folks still buy luxury cars that cost way more with no incentive.
 
#27 ·
I wasn't yelling, just emphasizing. Like I said earlier, the whole concept of a proportional incentives is way too simple. If it were up to me, I would definitely try hard to incentivize US-based manufacturing of affordable EV vehicles (I get the reason why the union worker thing is in this bill). I feel like it may also have been an effort to get at the "sentiment" that we should reward for work being done here on home soil in the US, the only problem being that there is also a lot of good work being done here in the States that is non-union based. I would also consider an allocation of incentive dollars specific to the EV's produced by US-based entities that is quota-based on some sort of environmental rating. So, yes, at first and for a specific duration of time or until allocations have been met, even some Rivian or Lucid buyers could get incentives while these new companies get off the ground.

These types of incentives aren't just for buyers, and they don't just have to be to targeted toward flooding the market with cheaper, more inexpensive EV's either. Why? Because if you can influence an entire population of future buyers across a range of demographics with a variety of smart consumer options designed for different budgets you will help solidify this entire electrification and clean energy movement and see innovation happening at a faster pace across a much broader spectrum. Anyway, that would be my goal. Then, all incentives can end and competition will drive down prices for everyone as technology advances (in theory). So it becomes the competitive advantage of EV nations.
 
#28 ·
I wasn't yelling, just emphasizing. Like I said earlier, the whole concept of a proportional incentives is way too simple. If it were up to me, I would definitely try hard to incentivize US-based manufacturing of affordable EV vehicles (I get the reason why the union worker thing is in this bill). I feel like it may also have been an effort to get at the "sentiment" that we should reward for work being done here on home soil in the US, the only problem being that there is also a lot of good work being done here in the States that is non-union based. I would also consider an allocation of incentive dollars specific to the EV's produced by US-based entities that is quota-based on some sort of environmental rating. So, yes, at first and for a specific duration of time or until allocations have been met, even some Rivian or Lucid buyers could get incentives while these new companies get off the ground.

These types of incentives aren't just for buyers, and they don't just have to be to targeted toward flooding the market with cheaper, more inexpensive EV's either. Why? Because if you can influence an entire population of future buyers across a range of demographics with a variety of smart consumer options designed for different budgets you will help solidify this entire electrification and clean energy movement and see innovation happening at a faster pace across a much broader spectrum. Anyway, that would be my goal. Then, all incentives can end and competition will drive down prices for everyone as technology advances (in theory). So it becomes the competitive advantage of EV nations.
Most folks consider all caps yelling and find it more difficult to read. If you want to emphasize text you could use bold or italics or underline or something.

I'm okay with emphasizing domestic production. If for no other reason then giant ships, wasting time, money and energy moving stuff from continent to continent. But I don't think that necessarily has anything to do with being union. They can specify the percentage of local production and or they can specify that it's Union Made, even if it's made another countries. I think it's just the existing manufacturers with unions have more connections in the government then Tesla or Rivian or other manufacturers that have satellite plants in states with lax worker protection.

I did say in one of the previous posts to whom I don't remember. But yeah the incentives are for the companies too and don't necessarily mean one company is going to flood the market with super cheap EVs, although that often does happen at first until other companies catch on. As I said before, the lowest spec vehicle that they're going to sell the most of is where it should be focused, but that in no way means that any company is not going to offer higher end vehicles. Most every vehicle I'm familiar with offers a base price model that is usually very difficult to get and then any add-ons like carbon fiber breaks or tires or anything else is like triple it's real value. If somebody wants to pay double the price for the same chassis and many of the same components but nicer seats and chunks of real wood in the dash, go for it but that shouldn't be where the incentive money goes. Companies are totally going to do that on their own. When they're making electric vehicles with batteries and electric motors. There's going to be natural incentive to make other vehicles with those components. Why go through the hassle of Internal combustion engine and everything that goes with it if you can just make another electric car using the same electric motors and batteries etc?
 
#29 ·
In my estimation, the current EV tax incentive is far more lucrative for Rivian than what could come in the BBB plan (should it make it through congress). The current EV credit law doesn't cap household income at any level nor put a cap on the value of the EV being bought. Rivian is largely a premium brand given their offerings. The Rivian brand is not intended to compete with low-cost EV offerings by any shape of the imagination.

While I have no statistics to present, my gut tells me a large contingent of the folks looking to spend well in to the 80k's for a vehicle have a household income that exceeds 250k. Even if you assuming households with an income of $150k are looking to spend more than half that on a Rivian truck, the fact it isn't built with union labor is going to dramatically reduce the credit available per the current terms of the BBB plan.

While its possible the EV credit terms being negiated in the BBB plan change before it is ultimately passed, I am not of the opinion that the key sticking points of the bill are related to the current EV credit language. The EV credit language seems largely set in stone from what I can tell and the bigger focus is the SALT deduction being increased, paid maternity leave and what benefits get adding to Medicare (hearing, dental, etc). In other words, Ill be shocked if much changes in the BBB plan in the senate that makes this bill anything other than a big bust as it relates to Rivian sales.
 
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