Leasing an R1T or an R1S Will Unlock the Full EV Tax Credit, Says Rivian CEO

Rivian CEO RJ Scaringe 10 photos
Photo: RJ Scaring on Twitter / edited
Rivian R1TRivian R1SEV Tax Credit Eligibility for the Rivian R1T and R1SRivian EDVRivian R1TRivian R1SRivian R1T and R1SRivian R1Ts and a Mobile Service EDVRivian's Standard Pack
Rivian is one of the newer players that joined the automotive industry. Like Tesla, it only makes EVs. The R1T pickup truck and the R1S SUV are great vehicles. They have proved their worth in numerous tests, and customer feedback is impressive, especially after the most recent update. But the brand's story isn't stopping here. Here's what the CEO has in mind.
Today, buying a Rivian is not something that only early adopters would consider doing. The brand proved it was serious about succeeding. It figured out how to ramp up production while making subtle changes and adjustments along the way. The R1T and R1S have been tried and tested by professionals, journalists, and customers. Most returned great feedback.

Besides that, the EDV and the accompanying software are helping e-commerce giant Amazon lower its carbon footprint by replacing delivery vans with all-electric ones manufactured in Normal, Illinois.

Rivian still isn't profitable, but the CFO recently said that revenue could overcome spending and selling automobiles at a loss by the end of 2024.

The dual-motor cut production costs by about 25% for the pickup truck and the SUV, and the young brand is pushing ahead with convincing people that the in-house Enduro power units are capable enough for nearly everything they might want to do.

It's all looking good for Rivian right now. But there still are some things that could be improved. The EV tax credit is one of them.

When writing, only the dual-motor + large pack R1T realistically qualifies for the EV tax credit. It has an MSRP of $79,000. The R1S would get the federal perk too, but only if it is paired with the smaller standard battery pack, which is not in production yet.

Besides that, the R1T only gets half the $7,500 awarded to eligible Americans who buy a zero-tailpipe emission vehicle. The vehicle is assembled in the US, but the battery doesn't have at least 40% of the critical minerals mined or processed in North America or in a country with which the US has a free-trade agreement signed. But that should change soon.

When writing, Rivian buyers have two options – pay in full or finance. Some Americans and Canadians did that and sold their EVs soon after taking delivery. That upset the automaker's CEO, Rivian Scaringe. He doesn't like that customers are selling their R1-series EVs for a profit.

Rivian R1Ts and a Mobile Service EDV
Photo: The Electric Rivet on Facebook
Leasing (also known as long-term renting) is a great solution that solves both problems – the customer gets the EV tax credit and obtains a lower monthly payment. At the same time, the CEO won't have to see so many R1Ts or R1S units on various car-selling platforms. In a chat with Morgan Stanley, the executive said this option would come soon.

Obtaining the full EV tax credit, however, depends on the automaker. The company has to pass it on to the customer. Ford or Hyundai, for example, do not do that. The CEO pointed out that the rates will be attractive, so we anticipate the federal perk won't be withheld.

Scaringe also said he's optimistic about how Rivian will continue to grow and is especially confident in the much-awaited R2-series. Up until now, the smaller EV line of more affordable automobiles was envisioned just as a baby sibling for the R1S. But Rivian might bring forward a competitor for the likes of Ford Maverick.

Rivian is following Tesla's playbook and is designing its own electronic control units that give it full control over the entire system. It can design, test, analyze, and upgrade everything without relying on an external partner.

Finally, the CEO said the grading at its next plant in Georgia is already done, and the actual construction should start next year. That's where the brand plans to start making the R2-series EVs that should also reach people living over the pond.

All the good news surrounding the Irvine-based automaker might encourage shareholders to continue investing in Rivian because it shapes up to become a smaller Tesla.
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About the author: Florin Amariei
Florin Amariei profile photo

Car shows on TV and his father's Fiat Tempra may have been Florin's early influences, but nowadays he favors different things, like the power of an F-150 Raptor. He'll never be able to ignore the shape of a Ferrari though, especially a yellow one.
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