Rivian claims that the new climate agreement disadvantages them.
Wednesday, August 3, 2022 | Chimniii Desk
Sen. Joe Manchin of West Virginia unexpectedly decided to back President Joe Biden's package of climate and healthcare expenditure initiatives late last Wednesday. Rivian Automotive Inc. (NASDAQ:RIVN), a startup manufacturer of electric vehicles, has issued a warning that the proposed changes to the EV tax credit will put the company at a disadvantage to more established rivals.
Rivian objects to a proposed cap that would exclude from the federal subsidies any electric trucks, SUVs, and vans selling for more than $80,000.
Jim Chen, vice president of public policy at Rivian, reportedly stated that "the whole objective of an incentive is to mainstream a new technology."
With any technology, Chen continued, "You start at a higher price point."
A federal tax credit of up to $7,500 is now available for electric vehicles; however, when a car maker sells 200,000 electrified vehicles, the benefit starts to taper down and finally expires.
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Additionally, Rivian is against the suggested income limitations. Buyers who make $150,000 or more in household income—$300,000 for married couples—would not be eligible for the credit on new EV purchases.
Rivian would be at a disadvantage over more established firms like Tesla (NASDAQ:TSLA) and General Motors Company (NYSE:GM), which had years to develop their manufacturing capacities, if customers of Rivian automobiles were no longer eligible for a loan. According to Mr. Chen, "We want the same opportunities Tesla and GM had to increase their electric-vehicle production."
In an effort to persuade Congress to include a two-year transition period in the new tax credit structure, the electric vehicle industry is pushing lawmakers. A transitional period would give Rivian time to enhance its manufacturing procedures and carry out its intentions to begin marketing its more affordable variant, known as the R2.
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