Rivian And Volkswagen ID.4 Owners: Your EVs Are Now Eligible For Federal Tax Credits

Rivian Automotive, Inc. RIVN has scored a partial victory as the electric vehicle maker's R1T EV pickup truck and RIS SUV have now become eligible for availing half of the $7,500 EV tax credit. Volkswagen‘s VWAGY ID.4 models have now been made eligible for the complete tax credit.

What Happened: Both models of Rivian, as well as the ID.4, were left out of the Internal Revenue Service’s initial list of vehicles that qualify for the tax credit released earlier this week. The updated tax credit become effective on Tuesday.

A Rivian spokesperson told WGLT.org that the company has submitted updated documentation to the IRS, claiming that its 2023 model R1T and R1S qualify for the critical material sourcing criteria.

"We expect the eligibility to be reflected on the IRS website pending future updates," the spokesperson reportedly said.

Pending review, Rivian customers may qualify for a $3,750 credit if at least 40% of the EV battery’s critical materials are extracted, processed, or recycled in the U.S. or a U.S. free-trade agreement partner. IRS guidelines state that this proportion is set to increase to 80% in 2027.

Volkswagen Group of America said in a statement that all 2023 ID.4 electric vehicles built in Chattanooga and placed in service this year are eligible for a $7,500 federal tax credit.

Benzinga was able to verify that the IRS website now reflects the modification and lists Rivian's and Volkswagen’s electric vehicles as eligible for tax credits.

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Why It’s Important: The grant of the partial credit should come as a positive for Rivian as it struggles with production issues and slowing demand amid an uncertain economic climate.

The ID.4 is already competitively priced in the electric SUV market, and the tax credit makes it even more accessible, according to Pablo Di Si, CEO of Volkswagen Group of America. “This shows that we made the right decision to localize production of the ID.4 in Tennessee and invest even further in battery production, components and innovation,” he said.

Rivian and other startups are also left to contend with leader Tesla, Inc.‘s TSLA aggressive pricing actions.

In premarket trading on Thursday, Rivian shares fell 2.34% to $12.52, according to Benzinga Pro data.

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Photo courtesy: Rivian, Volkswagen