Upcoming Rivian R2 will qualify for $7,500 EV tax credit, CEO says

Rivian R2 will qualify for the full $7,500 electric vehicle (EV) federal tax credit, says CEO RJ Scaringe in a recent interview while confirming its upcoming launch.

At CNBC’s Mad Money show, host Jim Cramer interviewed Scaringe and talked about the EV transition in the U.S. and investment around the EV infrastructure as well as the future of this vehicle market.

Cramer asked the Rivian chief about the issues around the R1T price and R1S, which cost over $70,000 in the U.S. and is preparing to compete with other companies such as Tesla.

Scaringe’s response was based on the upcoming Rivian R2 EV, which he is promoting as significantly less than R1T and R1S.

Rumors from the past suggest that this new vehicle could unveil between $40,000 to $50,000. It’s almost half of the price of Rivian R1T which starts at $73,000.

Rivian CEO remained mum on the price of Rivian R2 while saying R2 will be smaller in size and start at “a much lower price point”.

EV Tax Credit:

The CNBC host also shot a question about Rivian’s current strategy around the new Federal tax credit and how it would work out for future vehicles.

Scaringe replied that Rivian R2 is designed to become eligible for a $7,500 tax credit. He also mentioned that the R2 may start deliveries until 2026 and it would give the vehicle time for evaluation via authorities to check its eligibility for the tax credit.

Starting in January 2024, electric vehicles (EVs) are required to follow new rules for sourcing the vehicle parts. Popular Tesla Model 3, Chevrolet Blazer EV, and Nissan Leaf are some of the vehicles that lost EV tax credit eligibility.

As of February 1, 2024, there are 27 EV models listed for $7,500 federal tax credit on the EPA website. Among these, Rivian R1S and R1T models qualified for a $3,750 tax credit.

If the upcoming Rivian R2 starts at $40,000, it could lead the price to $32,500 with a $7,500 tax incentive. This will be a major difference in comparison to the R1T and R1s.

A leaked plan from last month suggests that Rivian would unveil R2 on March 7, 2024, at Laguna Beach, California. However, the company has not shared an official date for this unveiling.

(source)