Rivian doesn’t currently offer leasing and none of their passenger vehicles qualify for the full $7,500 Inflation Reduction Act (IRA) tax credit, but that may change soon, according to the company’s founder and CEO, RJ Scaringe, who spoke about the startup’s future during Morgan Stanley’s 11th annual Laguna Conference.
Scaringe said that Rivian didn’t offer leasing on purpose because it was confident the R1S and R1T would have good residual values, which led to situations where owners sold their EVs after just one month to make a profit. In other words, the price of a slightly used R1T or R1S might be higher than that of a brand-new one, which is “frustrating,” as Rivian’s CEO put it.
However, this means that demand is higher than supply and that there might be some wiggle room in the pricing department, so new builds might see their MSRPs go up. This isn’t the first time Scaringe distanced himself from the price-cutting strategy employed by other carmakers, saying during the company’s second-quarter earnings call on August 8 that Rivian feels quite comfortable with its positioning.
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As a result, the California-based firm will start to offer leasing options, although a timeline hasn’t been established, with the automaker’s head honcho saying that it’s very valuable for them to unlock leasing and that Rivian’s market-leading residuals will lead to “exceptionally strong leasing packages.”
Furthermore, it will enable customers to benefit from the full $7,500 IRA tax credit offered for lease deals, seeing how R1T and R1S buyers can currently take advantage of only the partial $3,750 tax credit (as long as the MSRP is under $80,000).
Speaking about the IRA’s application, the car manufacturer’s boss said that “it works great for leasing,” adding that “$7,500 does work.”
During the same conference, RJ Scaringe said that he’s very optimistic about the upcoming R2 platform, which will underpin a series of smaller all-electric vehicles that will be built at a new factory in Georgia. Regarding the company’s second factory, the CEO explained that the grading process is almost complete and that the building will start early next year.
