Fisker is looking for a way through the new tax credit stipulations.
The US government’s “Inflation Reduction Act” bill reforms the EV tax credits, for 2023 and onward. The refinements have been applauded by some, but derided by many, as new stipulations have complicated which EV and Plug-in vehicles will qualify for the tax credit. If the bill passes, new caveats for the price, and manufacturing country of origin content, have been added. Both news outlets and automakers alike have said that the bill’s implementation would disqualify more than 70% of all current EVs on sale.
Fisker would be greatly affected by this. Despite lower trims of the forthcoming Ocean SUV qualifying for the price-related criteria of the EV tax credit, the Ocean is still disqualified because of where it’s built. Fisker does have plans for US production at the former GM plant in Lordstown, Ohio, but that won’t be up and running for a while. Until then, all Fisker Oceans will come from Austria, disqualifying it from any tax credit entirely.
Fisker’s plan to preserve reservation holders’ eligibility for the $7,500 tax credit, is to convert a simple reservation, to an actual, binding sales contract. In theory, the new tax bill has a “Transition Rule,” which Fisker believes would make Ocean reservation holders still eligible for the tax credit, even in 2023. According to Fisker, the transition rule states that “any taxpayer that entered into a written binding contract for a qualifying vehicle prior to its enactment and takes delivery of such vehicle after enactment of the Inflation Reduction Act, may elect to treat the vehicle as having been placed in service on the day prior to the enactment of the Inflation Reduction Act.”
Fisker says that there’s no additional fee to change a reservation into a purchase agreement, but the purchase agreement becomes non-refundable in the process. If it holds true, maybe other automakers will adopt similar policies to ensure tax credits stay even if the manufacturer can’t fulfill orders by the end of this year.
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