Auto Industry News: Washington Says “No” to EV Tax Credit, Rivian Says “Yes Please” to $1.3B Investment, BMW Says “Uh Oh” to SEC, and FCA Says “We Got Cheap Cars!!”

As we all attempt to recover from a carbohydrate-induced holiday coma, the auto industry works to reorient itself for the closing of 2019, as well. Rivian gears up for the much-anticipated release of its R1T with yet another injection of capital. Congress takes no chances it’ll get stuck working Christmas, turning down a proposed EV tax credit expansion in favor of passing its 2020 spending bill. BMW lands in hot water with the SEC for playing fast and loose with its sales numbers. And FCA confirms that Q4 is still the best time to buy a car.

Plus, investigators determine a cause in Jessie Combs’ fatal accident and we round-up some interesting off-season racing news.

Congress Says: No Expansion for EV Tax Credit

Despite automakers pushing for a continuation of the federal EV tax credit program — which gave those consumers purchasing electric vehicles a retroactive discount come tax time—Congress has denied an extension past the current 200,000 vehicle quota.

Since 2010, EV buyers have been eligible to receive as much as $7,500 in federal tax credit for their purchase. However, once an automaker sells more than 200,000 electric and plug-in hybrid models, that credit lessens by half every six months, until it is completely exhausted. This proposed expansion would have reduced the credit by $500 but extended the vehicle cap to 600,000.

While many supporters of the bill pointed out the necessary role incentives play in pushing the mainstream adoption of new technology, the majority of lawmakers were ultimately disinterested. Wyoming Senator John Barrasso was the most vocal, proposing his own opposing bill that would not only terminate tax credits but actually impose a user fee on alternative fuel vehicles used in the U.S., as he feels the current EV program “disproportionally subsidizes wealthy buyers.”

“Nearly 80 percent of the tax credits go to households earning at least $100,000 a year,” Senator Barrasso said. “These car buyers don’t need a taxpayer subsidy.”

It was also not forgotten that the IRS has already struggled to properly vet existing tax credits. Others argued that these federal tax dollars (an estimated savings of $2.5 billion over 10 years) could be better spent improving the charging infrastructure needed to support widespread adoption of EVs. Still, others argued that EV production, which requires less bodies on the assembly line, will hurt U.S. manufacturing.

Ultimately, however, it appears Congress wanted to avoid a government shutdown, passing its $1.37 trillion budget package for 2020 without incident and with enough time to skedaddle out of D.C. before Christmas.

A Silver Lining?

The bright side for EV drivers is that the existing $7500 credit will remain in place for now, with Tesla and GM the only two automakers to have exceeded the 200,000-vehicle limit. (Tesla’s credits are already up; GM has until March.) That means, that other automakers looking to get in the EV sphere still qualify for the full credit—so long as its new ride has four wheels, weighs less than 14,000 pounds, has a battery capacity of a least four kilowatts, and is rechargeable.

“Seventy-five-hundred bucks less than your competitors is a good thing,” Brett Smith, director of propulsion technologies and energy infrastructure for the Center for Automotive Research told the Detroit News. “It’s a little bit unfair that [Tesla and GM] went out and really developed and pushed this technology, and now they are not going to have any federal discounts to offer.”

Looks like the early bird still gets the worm. So, if you’ve been eyeing up any of the exciting new EVs set to drop in 2020—the sooner you buy, the better next year’s tax return will look.

Rivian Scores $1.3 Billion Investment from T.Rowe Price

Speaking of electric vehicles and financial support, up-and-coming Rivian secured another round of significant funding—this time to the tune of $1.3 billion from asset management firm, T. Rowe Price.

The aspiring electric automaker, who looks to launch its first production vehicle by late 2020, has raised over $3 billion since 2009 from high-profile investors like Ford, Amazon, and Cox Automotive. Securing T. Rowe Price as an investor is a score for the young company, as the firm was previously one of the biggest shareholders in Tesla. (It just unloaded the majority of its stake earlier this year.)

Rivian can add this feather to its already-impressive cap, which includes a deal with Amazon for 100,000 electric delivery vans and an agreement to share its flexible skateboard platform with Ford for an all-new battery EV.

Additionally, if Rivian can successfully capture public attention, they qualify for the aforementioned EV tax credit that Tesla can no longer offer its customers. Who knows? That could be the real difference between someone opting for a stylish R1T over Musk’s dystopian Cybertruck…

FCA is Practically Giving Away Cars

Enough about EVs, though. Let’s talk about good, old-fashioned combustion engines. Better yet, let’s talk about can’t-believe-that-low-low-price-ICE-vehicles.

It’s fair to say that Fiat Chrysler’s last few months have been something of a mixed bag. Accused of building up a dreaded “sales bank” by forcing unwanted vehicles on dealerships, the automaker is also dealing with corruption accusations via its past dealing with UAW and a racketeering lawsuit from GM, all while securing a landmark merger deal with PSA Groupe to form the world’s third-largest automaker.

But it’s that first hiccup we’re focusing on today.

Because, it looks like FCA is trying to win back some goodwill with customers by unloading that massive “sales bank” in the form of rock-bottom pricing. Unfortunately, that doesn’t exactly earn them points with all the sales staff now working overtime to strongarm dealerships into taking all these extra units.

From Bloomberg: “Fiat Chrysler is making an all-out push to clear away tens of thousands of vehicles that its dealers haven’t ordered, adding to tensions over a new data-driven production strategy that can lead to swelling inventory. The Italian-American automaker is offering its most aggressive discounts since the financial crisis to sell certain 2019 model-year cars under its Dodge, Jeep and Ram brands, internal marketing documents show. In a conference call last week, sales staff were asked to work overtime to press the company’s network of 2,400 dealers to take more vehicles and shrink the unassigned inventory to zero before Christmas.”

While dealerships argue the “vehicle configurations don’t match market demand,” FCA is offering employee pricing that can reach 5% off what the dealer pays, plus extra rebates on certain vehicles. So, if you ain’t too picky about your wheel and tire package or exterior paint color, now’s the time to buy.

BMW Under SEC Investigation

‘Tis the season for federal investigations! ANOTHER big automaker finds itself in hot water this week, as reports indicate that BMW is officially under investigation by the U.S. Securities and Exchange Commission (SEC) for fudging sales numbers.

According to the Wall Street Journal, BMW has been using a long-known technique called “sales punching” to boost its figures, a process wherein the dealer counts unsold “loaner” cars on the lot among those that were actually sold. While the numbers look good on the balance sheet in the short term, things start to unravel when looked at long-term.

While the investigation is still new, it will be a rough financial time for BMW if the automaker is found to have misled investors. Just this year, FCA was ordered to shell out $40 million in penalties for inflating monthly sales figures between 2012 and 2016.

Neither BMW or the SEC have said much about the investigation publicly, so this is a wait-and-see story at the moment. We’ll have updates for you as usual along the way.

Around the Circuit

Formula 1: Leclerc Signs Five-Year Extension with Ferrari

Team Ferrari locked in its 22-year-old star driver Charles Leclerc with a brand new five-year contract this week.

Leclerc, driving as a replacement for Kimi Raikkonen, impressed Ferrari and fans this season by winning back-to-back races in Belgium and Italy, scoring seven pole positions, and ultimately finishing fourth in the overall standings, ahead of his teammate and four-time world champ Sebastian Vettel.

“With each passing race this year, our wish to extend our contract with Charles became ever more self-evident and the decision means he will now be with us for the next five seasons,” said Ferrari team principal Mattia Binotto. “We are very pleased that he will be with us for many years to come and I’m sure that together we will write many new pages in the history of the Prancing Horse.”

NASCAR: Full Hybrid Racing by 2022?

Looks like NASCAR is embracing the clean & green lifestyle for the new year, as it begins developing a plan to introduce fully hybrid-powered cars as early as 2022.

“We travel the world visiting other sanctioning bodies and are not ignorant to the fact that the world’s going towards more hybrid technology,” NASCAR’s SVP for Racing Development John Probst told TechCrunch during a track-side interview at Charlotte Motor Speedway. “I don’t know where the balance nets out for us long-term, but some form of hybrid technology is certainly on our radar…after 2021.”

While many might balk at the idea of a hybrid race car, at least some of the sport’s biggest names are on board already. “I’m a big fan of the technology,” NASCAR champ and current star driver Brad Keselowski told TechCrunch. “One, it gives the sport greater performance potential out of the cars and, two, it gives NASCAR relevance to the marketplace — because nobody will develop this technology harder or faster in motorsports than we will.”

RPM Act Moves on to the U.S. House of Representatives

The Recognizing the Protection of Motorsports Act of 2019 has taken another vital step towards becoming law, as it has been introduced in both the Senate and now the U.S. House of Representatives during the 2019-2020 session of Congress.

Initially proposed in 2016 to protect a racer’s ability to modify and build race cars, a right challenged by language in the 2015 reinterpretation of the Clean Air Act, this legislation would take a major step towards protecting the thriving motorsports community.

Those who are passionate about the bill are encouraged to write to their representatives to help push through the RPM Act in 2019. To write a letter to your U.S. Senators, visit www.sema.org/rpm.

Backed by SEMA, the passage of the RPM Act would literally impact tens of thousands of racing enthusiasts and motorsports fans every year, as well as taking the handcuffs off the billion-dollar racing products’ retail market.

Investigators Determine Cause of Jessi Combs’ Crash

After months of speculation, officials have finally announced a cause for the fatal car crash that killed fabricator, racer, and TV personality, Jessi Combs.

In a press release provided to USA TODAY by investigators in charge of the case, the renowned 39-year-old racer who died attempting to break the land-speed record earlier this year in Oregon likely was the victim of mechanical failure.

Per the release: “Based on the evidence collected and examined at the scene of the crash and the evidence recovered by the North American Race Team it appears that there was a mechanical failure of the front wheel, most likely caused from striking an object on the desert. The front-wheel failure led to the front wheel assembly collapsing. The front-wheel failure occurred at speeds approaching 550 miles per hour.”

Combs’ promising career was devastatingly cut short when her 52,000-horsepower jet-powered car crashed in Oregon’s Alvord desert on August 27, 2019, while attempting to break the Women’s Land Speed Record of 512 mph set by Kitty O’Neil in 1976. The official cause of death was determined to be “blunt force trauma to the head prior to the fire that engulfed the race vehicle after the crash.”