Should You Buy and Flip a Rivian Launch Edition R1T? Exploring All Sides of the Debate
Rivian's Launch Edition R1T has a high resale value, which is great news for those who have already purchased it. However, some people are buying the vehicle solely to take advantage of the $7,500 federal tax credit and then reselling it immediately, without ever taking delivery. This behavior could be considered unethical and against the spirit of the tax credit, although it is unlikely that the IRS would go after anyone for doing so.
In addition, there are also state-level requirements for claiming the tax credit that must be taken into account when considering this type of sale. California requires a 30-month ownership/lease requirement before being able to claim their credits. It is important to note that while Congress has cut funding for tracking down these types of sales, dealerships often place large markups on "in demand" vehicles as well.
At the end of the day, it is up to each individual to decide whether they want to buy and flip an EV or keep it long term. While flipping EVs may not be everyone's cup of tea, it does help Rivian as a company by increasing their sales and stock prices. Ultimately, if someone wants to make a profit off of their purchase, they should do their research and understand all of the rules and regulations associated with making such a sale.
The issue of flipping EVs is a complex one, and it's important to consider all sides before making any decisions. On the one hand, those who are buying and reselling Rivian vehicles are helping to increase demand for electric vehicles in general. This could be beneficial for the environment as more people switch from gas-powered cars to electric ones.
On the other hand, some may argue that this type of behavior takes away from those who genuinely want an EV but can't afford it due to its high cost or lack of availability in their area. It also doesn't help when dealerships place large markups on these types of vehicles which makes them even less accessible for many potential buyers.
At the end of the day, there isn't necessarily a right or wrong answer here; it really depends on each individual's personal beliefs and values when deciding whether they should buy and flip an EV or not. Ultimately though, if someone does decide to go down this route then they should make sure that they understand all applicable laws beforehand so that they don’t get into any legal trouble later on down the line!
Is it sad that someone bought a Launch Edition R1T and is now trying to resell it?
It could be seen as sad, but the fact that they have such high resale value means that it's more of a "being first on the block" kind of value vs. used car value. The tax credit could be an issue, as there is a rule about it being purchased for use and not resale. If caught, the person could be liable for short term capital gains from the sale, which could be close to 20k on the 60k profit, maybe more depending on the tax bracket.
Are people allowed to buy and flip EVs the next day?
Buying and flipping the next day is different than resale. You need a reseller license for it to be a resale (but you are not subject to sales tax when purchasing the vehicle as a reseller). The federal government doesn't care who collects the credit as the point of the credit is to get more EVs in the market. California does have a 30-month ownership/lease requirement for their credits. In a tax audit, this could be critical, although the odds of being called on it are slim.
Is it legal to sell an EV shortly after purchasing it in order to claw back the $7,500 in EV tax credit?
That finding EV'ers who sold their EV's shortly after purchasing them in order to claw back the $7,500 in EV tax credit is high cost and low return for IRS. It is not illegal, however it is not in line with the spirit of this tax credit. Congress has gutted IRS funding for tracking down this money, so it may go unnoticed.
Is it wrong for people to try and profit from selling their place in line without actually taking delivery?
Bashing people for trying to profit is pointless and of no value. It won't stop the behavior and this will not go on forever. At least they bought it and took delivery - that is good for Rivian as a company, its stock and the Rivian community. It comes across as sour grapes to criticize people for trying to make money off of their purchase.