Rivian Is Getting a Boost From California. Could Other States Follow Suit?
Yahoo Finance ·
The elimination of the $7,500 federal electric vehicle (EV) tax credit was a hard hit for most automakers, but Rivian Automotive ( RIVN +2.92% ) was especially affected. EV demand had already stalled, but without tax incentives, they became a harder sell than gas-powered vehicles. The state of California is taking action to incentivize car buyers to go green once again. The state has a new $135 million program to help first-time EV buyers through point-of-sale rebates. No tax filing is necessary. There is a catch that helps Rivian in particular but hurts its competitor, Tesla ( TSLA +0.34% ) . Incentives are available only for automobiles priced at or below $50,000 new and $25,000 used. The credit offers a $3,500 rebate for new vehicles and a $1,750 rebate for used vehicles. This immediately disqualifies most Tesla models, which are most often priced at luxury levels. The new Rivian R2 fleet, designed to be more affordable, starts at around $45,000. The incentive also waives the price cap entirely if the automaker is headquartered in California. Rivian is based in Irvine, while Tesla relocated to Texas.
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