[URGENT] $7500 credit for current reservation holders

[Chizle]

I would ague based on that verbiage that I made a non-refundable deposit which is an indication of a binding contract. It doesn't say "non-refundable deposit of 5% of the total contract price"

Yeah, its the "limited damages" stipulation and whether or not that is an issue. Not updated information is not completely clear.

 

[hydbob]

Just go straight to the source ...

New Final Assembly Requirement​

If you are interested in claiming the tax credit available under section 30D (EV credit) for purchasing a new electric vehicle after August 16, 2022 (which is the date that the Inflation Reduction Act of 2022 was enacted), a tax credit is generally available only for qualifying electric vehicles for which final assembly occurred in North America (final assembly requirement).

The Department of Energy has provided a list of Model Year 2022 and early Model Year 2023 electric vehicles that may meet the final assembly requirement. Because some models are built in multiple locations, there may be vehicles on the Department of Energy list that do not meet the final assembly requirement in all circumstances.

To identify the manufacture location for a specific vehicle, please search the vehicle identification number (VIN) of the vehicle on the VIN Decoder website for the National Highway Traffic Safety Administration (NHTSA). The website, including instructions, can be found at VIN Decoder.

Transition Rule for Vehicles Purchased before August 16, 2022​

If you entered into a written binding contract to purchase a new qualifying electric vehicle before August 16, 2022, but do not take possession of the vehicle until on or after August 16, 2022 (for example, because the vehicle has not been delivered), you may claim the EV credit based on the rules that were in effect before August 16, 2022. The final assembly requirement does not apply before August 16, 2022.

Vehicles Purchased and Delivered between August 16, 2022 and December 31, 2022​

If you purchase and take possession of a qualifying electric vehicle after August 16, 2022 and before January 1, 2023, aside from the final assembly requirement, the rules in effect before the enactment of the Inflation Reduction Act for the EV credit apply (including those involving the manufacturing caps on vehicles sold). If you entered into a written binding contract to purchase a new qualifying vehicle before August 16, 2022, see the rule above.

What Is a Written Binding Contract?​

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). While the enforceability of a contract under State law is a facts-and-circumstances determination to be made under relevant State law, if a customer has made a significant non-refundable deposit or down payment, it is an indication of a binding contract. 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. 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.

Future Guidance​

To reduce carbon emissions and invest in the energy security of the United States, the Inflation Reduction Act of 2022 significantly changes the eligibility rules for tax credits available for clean vehicles beginning in 2023. The Internal Revenue Service and the Department of the Treasury will post information and request comments from the public on various existing and new tax credit incentives in the coming weeks and months. Please look for updates on IRS.gov and other announcements from the Administration

 

[steveairgt]

I deal with lawyers a lot and every word matters. To me, it's all about that one word "Or" because it can be read as "if this OR that" you can have either.

I think it’s about intent. Plus the fact that this is not really new. There was a similar provision regarding the definition of a binding contract several years ago. It was always 5% of the purchase price. They always meant a deposit or down payment, whatever it’s referred to but it needs to be a serious amount which is 5%. A payment of such a small amount as $1000 on a $140,000 vehicle is not really binding you.

You can sue the IRS if you like but you’d likely loose.

 

[Chizle]

In General, we lose.
But by Exception, we win.

 

[HC_79]

I think it’s about intent. Plus the fact that this is not really new. There was a similar provision regarding the definition of a binding contract several years ago. It was always 5% of the purchase price. They always meant a deposit or down payment, whatever it’s referred to but it needs to be a serious amount which is 5%. A payment of such a small amount as $1000 on a $140,000 vehicle is not really binding you.

You can sue the IRS if you like but you’d likely loose.

What do you mean likely? The response would be “we didn’t mean it that way gtfo”

 

[USA2DAY]

There is another manufacturer that prior to the act told their reservation holders that if they confirm the orders they will receive the $7500 credit one way or other. Other manufacturers could follow suit. Also if the backlash is big enough and many people decide to cancel their orders because of the loss of credits the company might come up with additional incentives. I personally wouldn’t buy the pure air without the tax credit. I think there is a less of a difference for the more expensive trims but for the cheapest one this makes a big difference!
There is a poll in the forum so go ahead and take it

 

[HC_79]

There is another manufacturer that prior to the act told their reservation holders that if they confirm the orders they will receive the $7500 credit one way or other. Other manufacturers could follow suit. Also if the backlash is big enough and many people decide to cancel their orders because of the loss of credits the company might come up with additional incentives. I personally wouldn’t buy the pure air without the tax credit. I think there is a less of a difference for the more expensive trims but for the cheapest one this makes a big difference!
There is a poll in the forum so go ahead and take it

Maybe free DreamDrive Pro to existing reservation holders could appease people and probably not cost Lucid a lot of money.

 

[borski]

Maybe free DreamDrive Pro to existing reservation holders could appease people and probably not cost Lucid a lot of money.

A lot of us went through all this when we were trying to get 2021 deliveries of the Dream Editions rather than the 2022 deliveries.

Lucid won’t (and shouldn’t) do anything. They don’t have control over the political climate, and it is orthogonal to their vehicle sales. All the EV makers are in the same boat.

 

[HC_79]

A lot of us went through all this when we were trying to get 2021 deliveries of the Dream Editions rather than the 2022 deliveries.

Lucid won’t (and shouldn’t) do anything. They don’t have control over the political climate, and it is orthogonal to their vehicle sales. All the EV makers are in the same boat.

I agree, I don’t think they should do anything. Just depends if a lot of cancellations occur and they opt to do something to control the bleed. If it’s negligible though then yeah it’s just business as usual.

I’m of the opinion if you’re 100% reliant on the $7,500 tax credit and can’t get the car without it then maybe you shouldn’t have reserved it in the first place and perhaps this isn’t the best car for you.

 

[noobzilla]

I wish I'm rich enough like these folks here who are suggesting that "you're too poor to reserve an Air if you can't afford to lose $7500 credit / pay extra $7500". Must be nice to not care about much about $7500.

For me it was a case of $55k Model Y or $78k (or $71k) Lucid Air. Extra range and way better build quality. No contest there for extra $16k. Switch the tax credit (assuming Model Y qualifies) now we're looking at $48k Model Y vs $78k Lucid Air. From $16k difference to $30k difference.

 

[LCIDdreams]

I wish I'm rich enough like these folks here who are suggesting that "you're too poor to reserve an Air if you can't afford to lose $7500 credit / pay extra $7500". Must be nice to not care about much about $7500.

For me it was a case of $55k Model Y or $78k (or $71k) Lucid Air. Extra range and way better build quality. No contest there for extra $16k. Switch the tax credit (assuming Model Y qualifies) now we're looking at $48k Model Y vs $78k Lucid Air. From $16k difference to $30k difference.

I agree that once you get to comparing with other cars that do have the credit it becomes a more significant factor.

I don’t think your Y comparison is right though… it starts at $66k from what I can see so it’s really a $5k difference (pre-inflation reduction act) that becomes a $20k difference, assuming Y complies with both the battery material sourcing and assembly %.

 

[steveairgt]

I agree that once you get to comparing with other cars that do have the credit it becomes a more significant factor.

I don’t think your Y comparison is right though… it starts at $66k from what I can see so it’s really a $5k difference (pre-inflation reduction act) that becomes a $20k difference, assuming Y complies with both the battery material sourcing and assembly %.

I don’t understand why a potential Model Y buyer would consider a Lucid or vice versa. These are totally different cars in different classes.

I would think a Lucid Air is more a comparison to a Model S sedan.

A Model Y is sort of a mini SUV or crossover.

 

[noobzilla]

I agree that once you get to comparing with other cars that do have the credit it becomes a more significant factor.

I don’t think your Y comparison is right though… it starts at $66k from what I can see so it’s really a $5k difference (pre-inflation reduction act) that becomes a $20k difference, assuming Y complies with both the battery material sourcing and assembly %.

You're right about the price. Thanks for catching that. I did my analysis back in Q1 and I mustve mixed the 3 and Y prices in my head today. Tesla did a price increase recently too. $5k difference to $20k difference is still a significant change though.

I don’t understand why a potential Model Y buyer would consider a Lucid or vice versa. These are totally different cars in different classes.

I would think a Lucid Air is more a comparison to a Model S sedan.

A Model Y is sort of a mini SUV or crossover.

Mostly looking from a budget perspective. Say a person is willing to spend up to $80k on an EV.. what are the options out there. The Pure sits in between a Y and S price wise. Neck to neck with car spec and type, yes an S or even the 3 is a better comparison to an Air

 

[LCIDdreams]

One thing is for sure, Lucid advisers will be under a lot of pressure from reservation holders to get a delivery date by 12/31/22

 

[Steveinarizona]

I don’t understand why a potential Model Y buyer would consider a Lucid or vice versa. These are totally different cars in different classes.

I would think a Lucid Air is more a comparison to a Model S sedan.

A Model Y is sort of a mini SUV or crossover.

I agree. Also, like many who have reserved Lucids, I will not buy a Tesla. But there are an increasing number of alternatives from car companies like Polestar, Mercedes, BMW, Audi, Cadillac, Chevrolet, Ford, etc..

I have reserved a Pure. If they don't eliminate too many features, and keep their promises, I will buy my Pure with our without the credit. If they don't keep their promises, or don't continue to improve the software, I currently have a deposit down on a Cadillac Lyriq as an alternative.

 

[changinator]

I agree. Also, like many who have reserved Lucids, I will not buy a Tesla. But there are an increasing number of alternatives from car companies like Polestar, Mercedes, BMW, Audi, Cadillac, Chevrolet, Ford, etc..

I have reserved a Pure. If they don't eliminate too many features, and keep their promises, I will buy my Pure with our without the credit. If they don't keep their promises, or don't continue to improve the software, I currently have a deposit down on a Cadillac Lyriq as an alternative.

I was also eyeballing the Cadillac Lyriq as well, but I'm conflicted in settling for a slimy GM product, the corporation responsible for secretly pushing legislation to take away tax credits from Lucid and their other EV competitors

 

[steveairgt]

I can’t believe that someone considering a Lucid would also consider a Cadillac…..

Having owned two Teslas (S and X) I can’t imagine a company that produced ICE cars for a century would produce a good EV. Look at their three failures; EV1, Volt, Bolt.

I expect GM to be history in a decade.

My opinion is that I only plan to look at EV-only companies.
I’m awaiting my AGT.

 

[Steveinarizona]

I was also eyeballing the Cadillac Lyriq as well, but I'm conflicted in settling for a slimy GM product, the corporation responsible for secretly pushing legislation to take away tax credits from Lucid and their other EV competitors

I know and I was very concerned about a GM product although more because of GM's lawsuit against California's clean air rules. That is one reason why it is a backup and if I decide not to proceed with the Lucid, there will be other choices and the deposit is refundable and $100 won't bankrupt me anyway.

 

[USA2DAY]

Called a Lucid showroom and asked them for updates since IRS gave guidance on valid purchase agreements. According to the woman nothing has changed and we still should be able to claim the tax credit but she used the same talk to your cpo that they had in the original email. Still said that we have valid order

 

[muhanadkais]

Maybe free DreamDrive Pro to existing reservation holders could appease people and probably not cost Lucid a lot of money.

I would encourage that and it will be a smart move to make those customers with the existing reservations love their cars to promote them. BTW, Tesla did the same thing in the beginning and offered free FSD to many customers until 2019.