7500 EV tax credit update with new bill

[Draco_Malfoy]

Help me out I'm still a little confused. I thought the only thing that changed for August 16, 2022 to December 31, 2022 was the requirement for the vehicle to be assembled in the U.S. to qualify for the tax credit. I thought the vehicle price cap and income limitation don't go into effect until January 1, 2023. So can't Lucid buyers hope for a December 31, 2022 delivery and still get the full $7,500 credit even though the car is over $55k and even though they make over $300k? Did I misunderstand?

 

[Chizle]

Help me out I'm still a little confused. I thought the only thing that changed for August 16, 2022 to December 31, 2022 was the requirement for the vehicle to be assembled in the U.S. to qualify for the tax credit. I thought the vehicle price cap and income limitation don't go into effect until January 1, 2023. So can't Lucid buyers hope for a December 31, 2022 delivery and still get the full $7,500 credit even though the car is over $55k and even though they make over $300k? Did I misunderstand?

Yeah, you misunderstood the likelihood of 30k lucid customers getting their cars by the end of the year. lol

 

[Tim-in-CA]

So does this mean that the contract is null and that if we don't go through with the purchase, that the deposit (for me $1k) is refundable? That's the right thing for Lucid to do.

 

[Babyrocko1908]

Folks, lets be careful here. The IRS states under it's "What is a written binding contract" section that "For example, if a customer has made a non-refundable deposit or down payment of 5 percent of the total contract price, it is an indication of a binding contract. A contract is binding even if subject to a condition, as long as the condition is not within the control of either party. A contract will continue to be binding if the parties make insubstantial changes in its terms and conditions."

The key here for our $1,000 non-refundable deposit to count under the OLD $7,500 credit is that small two letter word -- OR! It's non-refundable deposit OR down payment of 5% of the total contract price. We're good folks. Let's not make this more complicated than it needs to be. Lucid's legal team got this right.

 

[DJL]

Folks, lets be careful here. The IRS states under it's "What is a written binding contract" section that "For example, if a customer has made a non-refundable deposit or down payment of 5 percent of the total contract price, it is an indication of a binding contract. A contract is binding even if subject to a condition, as long as the condition is not within the control of either party. A contract will continue to be binding if the parties make insubstantial changes in its terms and conditions."

The key here for our $1,000 non-refundable deposit to count under the OLD $7,500 credit is that small two letter word -- OR! It's non-refundable deposit OR down payment of 5% of the total contract price. We're good folks. Let's not make this more complicated than it needs to be. Lucid's legal team got this right.

Sir,
While I love your interpretation, and I do wish you were correct, I am having a hard time believing that you are. There are two key sentence to the IRS's definition of a "binding written contract". The first sentence: "In general, a written contract is binding if it is enforceable under State law and does not limit damages to a specified amount (for example, by use of a liquidated damages provision or the forfeiture of a deposit).

An second key sentence is : For tax purposes in general, a contract provision that limits damages to an amount equal to at least 5 percent of the total contract price is not treated as limiting damages to a specified amount.
The use of the word "or" in their example sentence ( i.e., " For example, if a customer has made a non-refundable deposit or down payment of 5 percent of the total contract price, it is an indication of a binding contract."},
WIth thses understanding, I regret that your interpretation is incorrect. .... Damn!

Our confirmation purchase agreement's article 3 is specific for liquidated damages which are limited to the deposit amount, which is significantly less than $5,000.. See below.
Thus, I do not believe you are correct, even though I truly wish you were.

 

[SDHacker]

The use of the word "or" in their example sentence ( i.e., " For example, if a customer has made a non-refundable deposit or down payment of 5 percent of the total contract price, it is an indication of a binding contract."},

I think it would help if people started reading this as (non-refundable deposit or down payment) of 5 percent which translates in simple English to a non-refundable deposit of 5 percent or a down payment of 5 percent.

 

[TCGT]

 

[OldAg]

Hopefully the great Senator from Arizona will help the IRS determine what the bill means. She certainly made sure the wealthy hedge fund people didn’t lose the carried interest loop hole. If they can’t make my silver car before January I will probably get a nice $150,000 Porsche and live happily ever after.

 

[hitmanray]

I personally don't fault Lucid for the issues with the IRS guidance and the level of deposit that is required for meeting the context of a binding contract. They took a shot at helping us out and it didn't work.

The thing that is starting to grate on me a little bit as a very early Touring reservation holder is the production scheduling choices. I get that the GT's make them more margin, but we have been consistently told that Touring production was imminent. Even when given the choice to upgrade reservations for the initial pricing, the indication was still that Touring's would be in production in Q3 and some delivered in Q4.

Now here we are in late August and I have no faith in my car being delivered in 2022, meaning I will now miss out on the tax rebate (again not directly Lucid's fault) but I have to believe there are folks placing GT orders in early '22 (following release of the DE's and all the favorable press etc) who will get their vehicles in '22 and will get the rebate, when I most likely won't.

Again, no ill will to any late GT order holders, just think it can't be that hard (especially having seen some of the tech talk videos) to produce vehicles with lower specs by simply not installing some of the modular components in your modular design.

Perhaps Lucid can reopen the offer to some of us early reservation holders to upgrade to a vehicle they can produce in '22, but honoring the original pricing still. I can't believe that would hurt them overall because they still end up with potentially more takers of the higher spec.

For me, I was looking at a high spec Touring (about $111k if memory serves me right) vs standard spec GT (about $139k) and couldn't justify the $28k difference. If that difference can now be $20k due to a GT delivered in '22 will get me the rebate whereas my '23 delivered Touring won't, maybe that is something I would do now to get the power increase and massaging seats?

 

[Psymac]

I personally don't fault Lucid for the issues with the IRS guidance and the level of deposit that is required for meeting the context of a binding contract. They took a shot at helping us out and it didn't work.

The thing that is starting to grate on me a little bit as a very early Touring reservation holder is the production scheduling choices. I get that the GT's make them more margin, but we have been consistently told that Touring production was imminent. Even when given the choice to upgrade reservations for the initial pricing, the indication was still that Touring's would be in production in Q3 and some delivered in Q4.

Now here we are in late August and I have no faith in my car being delivered in 2022, meaning I will now miss out on the tax rebate (again not directly Lucid's fault) but I have to believe there are folks placing GT orders in early '22 (following release of the DE's and all the favorable press etc) who will get their vehicles in '22 and will get the rebate, when I most likely won't.

Again, no ill will to any late GT order holders, just think it can't be that hard (especially having seen some of the tech talk videos) to produce vehicles with lower specs by simply not installing some of the modular components in your modular design.

Perhaps Lucid can reopen the offer to some of us early reservation holders to upgrade to a vehicle they can produce in '22, but honoring the original pricing still. I can't believe that would hurt them overall because they still end up with potentially more takers of the higher spec.

For me, I was looking at a high spec Touring (about $111k if memory serves me right) vs standard spec GT (about $139k) and couldn't justify the $28k difference. If that difference can now be $20k due to a GT delivered in '22 will get me the rebate whereas my '23 delivered Touring won't, maybe that is something I would do now to get the power increase and massaging seats?

If you upgrade to a grand touring, Lucid would still give you the old price?

 

[hitmanray]

If you upgrade to a grand touring, Lucid would still give you the old price?

No, not today. I am saying Lucid should reopen the offer to give us the option of upgrading at the old price, given that they haven't' been able to meet their production commitments.

I guess it all depends on how many GT orders Lucid has to deliver this year and whether we would even make it into '22 production if we switched now.

 

[idiot900]

No, not today. I am saying Lucid should reopen the offer to give us the option of upgrading at the old price, given that they haven't' been able to meet their production commitments.

Demand is greater than supply - so they should give a discount? Wouldn't complain, but that seems like the opposite of what the market would dictate...

 

[hitmanray]

Demand is greater than supply - so they should give a discount? Wouldn't complain, but that seems like the opposite of what the market would dictate...

I understand market economics. But you could make the argument that their inability to produce to their projections is what is limiting supply.

I have been super supportive of Lucid and am really excited by the product, but back to market economics, the competitor landscape today is very different than it was when I placed my deposit. I have been super patient and supportive, but surely it would be in Lucid's interest to try to offer me (an early adopter evangelist of the company vision) a solution to try and make me feel better than risk losing my order completely?

 

[MPawelek]

Lucid is a for profit business. Feelings do not count.

 

[hitmanray]

Lucid is a for profit business. Feelings do not count.

LOL!!! Spoken like an MBA

You are right, Lucid can do whatever they want. And they will probably not cry if I cancel my reservation.

But I just wanted to express my opinion that while they have been dealt a bad hand by the change in the regulatory environment they absolutely have the power to do something for those order holders who may be impacted by this. I am not asking for anything other than an OPPORUNITY to change my reservation to a version that will make Lucid MORE profit for the same reservation vs the risk of losing that reservation entirely.

Why would they not want that?

 

[idiot900]

I understand market economics. But you could make the argument that their inability to produce to their projections is what is limiting supply.

I have been super supportive of Lucid and am really excited by the product, but back to market economics, the competitor landscape today is very different than it was when I placed my deposit. I have been super patient and supportive, but surely it would be in Lucid's interest to try to offer me (an early adopter evangelist of the company vision) a solution to try and make me feel better than risk losing my order completely?

Is that suggestion profitable for them, in either the short or long term?

 

[noobzilla]

LOL!!! Spoken like an MBA

You are right, Lucid can do whatever they want. And they will probably not cry if I cancel my reservation.

But I just wanted to express my opinion that while they have been dealt a bad hand by the change in the regulatory environment they absolutely have the power to do something for those order holders who may be impacted by this. I am not asking for anything other than an OPPORUNITY to change my reservation to a version that will make Lucid MORE profit for the same reservation vs the risk of losing that reservation entirely.

Why would they not want that?

Did you talk to the sales agents and managers? Playing field has changed, so Lucid may grant exceptions and allow that. If you haven't yet then compose a nicely written email explaining the situation. Would be more productive figuring it out with them than venting out here on the forums. It's a long shot but you can also email the CEO or Sales VP. I surprisingly did get a response. Good luck!

 

[hitmanray]

Is that suggestion profitable for them, in either the short or long term?

I mean I'm not sure how it wouldn't be. Here's how I see it going:

• Send out an email to all reservation holders of Touring/Pure placed before Jan 1 '22 (those who could have had a reasonable expectation of receiving their vehicle in '22)
• Offer the upgrade to GT again for original price ($139k).
• Offer remains open for 2 weeks

If people accept it turns more orders into higher revenue orders. It also adds to the backlog of orders that they can currently produce vs versions they can't currently produce, so potential to turn more revenue before end of the year.

If people don't accept then no harm no foul. At least they tried to help accommodate people due to a regulatory issues outside of their control. If people don't accept the opportunity then that's on them.

The only scenario where this is not good for Lucid is if they can't make a profit on GT @ $139k, in which case we should all be running for the hills because they are not gonna be around for long.

 

[hitmanray]

Did you talk to the sales agents and managers? Playing field has changed, so Lucid may grant exceptions and allow that. If you haven't yet then compose a nicely written email explaining the situation. Would be more productive figuring it out with them than venting out here on the forums. It's a long shot but you can also email the CEO or Sales VP. I surprisingly did get a response. Good luck!

Sorry, didn't think I was venting! Just sharing an opinion. Trying to offer a solution. Tons of posts here about the nuance of the interpretation IRS guidelines and what constitutes a confirmed contract or not. Thought I had a different, interesting angle on the problem to share. I kind of feel like that is what the forums are about.

 

[MPawelek]

LOL!!! Spoken like an MBA

You are right, Lucid can do whatever they want. And they will probably not cry if I cancel my reservation.

But I just wanted to express my opinion that while they have been dealt a bad hand by the change in the regulatory environment they absolutely have the power to do something for those order holders who may be impacted by this. I am not asking for anything other than an OPPORUNITY to change my reservation to a version that will make Lucid MORE profit for the same reservation vs the risk of losing that reservation entirely.

Why would they not want that?

No, Retired International Farmer that has grown crops in the U.S., Brazil, Argentina, Spain, Italy, and Lebanon. In all my years of business I have never experienced a product in short supply where the price went down.