We wrote that the Vietnamese EV car company Vinfast is bringing its EV companies to the US. Since then, Congress has announced changes to the $7,500 federal electric vehicle tax credit, which means it will be much harder to get that sweet, sweet tax deduction. The two main changes are that the tax credit will become means-tested (i.e. if your household earns more than a certain amount, you will not be eligible) and the sticker price will be capped (cars over $40k and SUVs and trucks with a slightly higher cap) . That’s pretty dramatic – up to 70% of today’s electric vehicles wouldn’t qualify for a credit, Reuters reports:.
Several automakers have struggled to figure out how to respond, but VinFast is taking more extreme steps than most, promising that if you pre-order with the manufacturer and you no longer qualify for the tax credit, they will give a $7,500 discount on the car instead.
“VinFast is a brand that not only stands behind our vehicles with our 10-year/125,000 mile warranty, but most importantly, we stand behind our customers!” the company writes in an email to its pre-order holders. “For customers who request the $7,500 tax credit under current IRC 30D requirements and are denied by the IRS for reasons not attributable to the customer, VinFast will provide the customer with a $7,500 discount off the purchase price (or equivalent discount). ) on the purchase of their VinFast vehicle. The binding agreement contains additional details about eligibility for the discount.”
This offer is subject to certain conditions; customers must convert their non-binding $200 pre-order into a written binding contract. The $200 refundable reservation fee becomes non-refundable, and the contract the company generates means you can try your luck with the IRS, with the current $7,500 tax credit before Congress changes the program. If it fails, the $7,500 discount will kick in, the company announced.
Personally, I think it’s pretty smart to lower the tax deduction to $40,000 – yes, most cars aren’t covered, but it means cheap EVs will become more accessible to customers and will incentivize manufacturers to make more accessible EVs. In the end; it’s nice that we have electric trucks that beat sports cars on the drag strip and family cars that are the fastest things on the road, but those are marketing headlines. To really dent climate change, we need to encourage as many people as possible to switch from petrol and diesel to electric as soon as possible – and we won’t get there by Tesla Model S Plaid to the 1% of the population who can afford them.