We wrote that the Vietnamese EV car company Vinfast is bringing its EV companies to the US. Since then, congress announced it is making changes to the $7,500 federal electric vehicle tax credit, meaning that it becomes much harder to get that sweet, sweet tax deduction. The two major changes are that the tax credit will becomes means-tested (i.e. if your household makes more than a certain amount, you don't qualify) and sticker-price limited (cars over $40k and SUVs and trucks with a slightly higher limit). That's pretty dramatic – up to 70% of today's electric vehicles would not be eligible for a credit, Reuters reports.
Various car manufacturers have scrambled to figure out how to react, but VinFast is taking more extreme steps than most, promising that if you have a pre-order with the manufacturer and you are no longer eligible for the tax rebate, they'll give you 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 more importantly, we stand behind our customers!” the company writes in an email to its pre-order holders. “For customers who apply for 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 a $7,500 purchase price rebate (or similar rebate) on their VinFast vehicle purchase. The binding agreement contains additional details on eligibility for the rebate.”
This offer comes with a few conditions; customers have to convert their non-binding $200 pre-order to a written binding contract. The $200 refundable reservation fee will become 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 kicks in, the company announced.
Personally, I think it's pretty clever to lower the tax rebate to $40,000 — yes, most cars won't be covered, but it means that low-end EVs become all that more accessible to customers and will incentivize manufacturers to create more accessible EVs. Ultimately; it's fun that we have electric trucks that are beating sportscars on the drag strip and family saloons that are the quickest things on the road, but those are marketing headlines. To put a real dent in climate change, we need to incentivize as many as people to make the switch from gasoline and diesel to electric as soon as we can — and we're not going to get there by flogging Tesla Model S Plaid to the 1% of the population who can afford them.