Automotive industry navigates the complexities of transitioning to electric vehicles (EVs), Rivian Automotive is carving out a significant niche with its all-electric R1S SUV and R1T pickup. One of the most strategic moves by Rivian lately is the introduction of a leasing program for its R1S model, a decision tailored to benefit from federal incentives and to stimulate its sales trajectory.
In a market update that reflects both the innovative approach of the EV manufacturer and the current economic incentives supporting green vehicle adoption, Rivian has announced a leasing program that effectively integrates the $7,500 federal tax credit into the lease agreement. This leasing offer became particularly attractive as the Inflation Reduction Act altered the eligibility for EV tax incentives, disqualifying certain direct sales from receiving the federal tax credit due to price caps, among other restrictions. However, this act did not impact leases in the same way, enabling Rivian to capitalize on the policy’s benefits on behalf of its customers.
The leasing program, following similar initiatives by other EV makers to provide cost savings to customers, has been designed to be highly competitive. For instance, Rivian’s website presents a leasing example for the R1S with a sticker price of $100,800. This package includes the quad-motor setup, a large battery pack, and other premium features. The lease terms are presented as $1,169 per month over 36 months for 30,000 miles, with a total due at signing of $9,064. It is worth noting that the leases are facilitated through a partnership with Chase, expanding Rivian’s financial offerings to potential consumers.
Moreover, this leasing strategy appears to be resonating well with the market. Kelley Blue Book has estimated that Rivian sold 8,243 R1S crossovers last year, a number that is expected to rise as the company ramps up production and expands its lease offerings to more states and custom orders. Until the middle of 2023, the R1T was outpacing the R1S in sales, but the increased production of the R1S could see this trend shift.
Interestingly, leasing has been one of the most requested financing options from Rivian customers since the company initiated its program with the R1T. The R1S program further cements Rivian’s commitment to addressing consumer demands and adapting to the evolving landscape of EV financing and incentives.
Rivian’s leasing approach is an important avenue through which manufacturers can leverage federal incentives to make EVs more accessible to consumers. The impact of the Inflation Reduction Act on tax credits has led Rivian and others to consider leasing as a way to pass savings on to the lessee, despite stricter regulations on EV tax credits that came into effect at the start of the year.
Rivian’s smart use of the leasing system a wider trend in the EV industry, where manufacturers are adjusting to policy changes and market needs. Their ability to provide financially appealing options to consumers not only aims to increase sales but also to speed up the adoption of electric vehicles.
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