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 and extending availability for 10 years, 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 a buyer who signs a binding purchase agreements today can, if they choose, treat the credit as if they 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 of 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.
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.
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.
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 – though a binding agreement must still be signed before the bill is signed in order to qualify for the “old” tax credit.
Update: Lucid has contacted reservation holders and given the option of converting their $1,000/$300 reservation fee into a non-refundable deposit and binding agreement to purchase the car. Check your email, or log in to your Lucid account, then go to your “designs and orders tab.”
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.
We heard from VW and it had no additional comment beyond what we’ve written here.
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 place before the “old” tax credit ramps down due to the company hitting the 200k cap. This and the Toyota bZ4X (which just hit the 200k cap) are the only vehicles for which this is the case (we haven’t covered Toyota or Subaru in this post, since their EVs are currently under an indefinite recall and are not being sold).
So, oddly enough, the cap and ramp-down period might still remain relevant for this car, but only if Nissan allows for binding purchase agreements on a car that isn’t yet made. We reached out to Nissan about this, and this was its response:
Regarding the Inflation Reduction Act, we are closely evaluating the bill in its entirety and considering potential actions that are in the best interest of our customers.
The Leaf is readily available, but since it’s assembled in Smyrna, TN, it will still qualify for the new tax credit (and since the 200k cap is removed by the bill, you don’t have to worry about that either), so if you want a Leaf, there’s no rush.
BMW tax credits
BMW has a diverse lineup of PHEVs and EVs with various US availability and NA-assembly status. Without digging into the weeds, in general, BMW’s EVs are built outside of the US, but some of its PHEVs are built here.
As a result, most BMWs will lose access to credits right away when the bill is enacted, but some of its US-assembled PHEVs might actually get larger credits.
BMW’s i7 is still on pre-order, so if you’re looking for that car you’ll have to contact BMW to see if you can get a purchase agreement, but the iX and i4 are available in dealerships. If you’re interested in either of those, click through to check local dealerships for the BMW i4 or the BMW iX.
And credits are perhaps most relevant for the Mini Cooper SE, BMW’s lowest price electric offering, for which the tax credit makes up a big chunk of the purchase price. These have been available at dealers for some time, so if you were thinking of getting one, check your local dealer inventory now.
Audi tax credits
Audi has several vehicles over the price cap, and all are assembled outside the US. Most of its EVs are available from dealerships now, though, so you don’t have to mess around with pre-orders or custom builds to take advantage of the EV tax credit. We reached out to Audi, who did not have a comment at this time.
If you’re looking for an Audi EV, click to check your local dealer inventory for an Audi e-tron, an Audi Q4 e-tron, or Audi e-tron GT.
Porsche tax credits
While Taycan buyers are less likely to really need access to this tax credit in order to make their $90k+ car affordable, surely everyone would like to save money if possible. Taycans are both built outside the US and are over the price cap and therefore won’t qualify once the bill goes into effect.
A Porsche dealer told us new Taycans are currently preordered about a year ahead of time (Porsches have lots of options for customization so owners like to get exactly what they ordered). The dealer said it isn’t aware of any method to offer a purchase agreement that far in advance.
But every once in a while, dealers do have a new Taycan on the lot, so if you’re thinking about getting one, check your local dealer inventory for a new Taycan and get it this week.
Mercedes tax credits
Like the Porsche Taycan, the Mercedes EQS is both foreign-assembled and above the new bill’s price cap. But unlike the Taycan, Mercedes seems to have quite a lot of EQS inventory available at dealerships.
If you want to save a small chunk of the EQS’ six-figure base price, check your local dealer inventory and go snatch one up.
Volvo tax credits
Volvo’s all-electric “Recharge” models seem to be reasonably available – we found a couple all-electric C40 Recharges at our local dealer, but no XC40 Recharge. We also found several of Volvo’s PHEV models, which will lose access to credits due to overseas final assembly (except the S60, which is assembled in South Carolina).
So, like the rest of the cars on this list, if you’re looking to buy any of Volvo’s EV or PHEV models (say it with us now), check your local dealer inventory.
Other automakers?
We reached out to all of the above automakers for comment but as of press time, we hadn’t heard back for all of them (we’ll update this article whenever we learn more).
If you’re a buyer who is planning to buy an EV that might lose access to the old tax credit (assembled outside North America, over the $55k car/$80k SUV/truck price cap) but are waiting for delivery and haven’t yet signed a contract, check in with your dealer or the manufacturer about the possibility of signing a contract early.
If you have questions about another automaker we haven’t listed here, or if you find out more than we know in this article, feel free to drop us an email.
Subscribe to Electrek on YouTube for exclusive videos and subscribe to the podcast.
Author: Jameson Dow
Source: Electrek
