Vicinity Motor Corp. Customers Eligible for U.S. IRS Commercial Clean Vehicle Tax Credit of Up to $40,000 per Vehicle

Rhea-AI Summary

Vicinity Motor Corp. (NASDAQ:VEV)(TSXV:VMC) announces that its customers are now eligible for significant U.S. IRS tax credits on their electric vehicle purchases. The Commercial Clean Vehicle Credit offers up to $7,500 for the VMC 1200 Class 3 Electric Truck and up to $40,000 for the Vicinity Lightning electric transit bus. This credit, part of the Inflation Reduction Act of 2022, aims to incentivize businesses and tax-exempt organizations to electrify their fleets. Vicinity has been approved as a 'qualified manufacturer' by the IRS, with no limit on the number of credits a business can claim. The company views this as an opportunity to attract new buyers and lower costs for those transitioning to EVs for their business.

Positive

• Customers eligible for up to $7,500 tax credit on VMC 1200 purchases
• Customers eligible for up to $40,000 tax credit on Vicinity Lightning electric transit bus purchases
• No limit on the number of tax credits a business can claim
• Approved as a 'qualified manufacturer' by the IRS
• Potential to attract new buyers and lower costs for businesses transitioning to EVs

Negative

• None.

Insights

Financial Analyst

The IRS approval of Vicinity Motor Corp. as a 'qualified manufacturer' for the Commercial Clean Vehicle Credit is a significant development for the company's market positioning. This tax credit, offering up to $7,500 for the VMC 1200 and $40,000 for the Lightning Electric Transit Bus, substantially reduces the effective cost for potential buyers. In the price-sensitive commercial vehicle market, this cost reduction could be a game-changer.

From a financial perspective, this credit could accelerate Vicinity's sales cycle and improve its competitive position. The absence of a limit on the number of credits a business can claim is particularly noteworthy, as it could encourage bulk purchases from fleet operators. This could lead to improved revenue predictability and potentially higher order volumes.

However, investors should note that while this credit enhances Vicinity's value proposition, it doesn't directly impact the company's margins. The real test will be how effectively Vicinity can leverage this advantage to capture market share and drive sales growth. Keep an eye on upcoming quarterly reports to gauge the impact on order books and revenue growth rates.

Environmental Policy Expert

The inclusion of Vicinity Motor Corp. in the IRS's Qualified Manufactured index underscores the broader policy shift towards electrification in the commercial vehicle sector. This move aligns with the goals of the Inflation Reduction Act of 2022, which aims to accelerate the adoption of clean energy technologies.

The substantial tax credits - up to 25% of the vehicle cost for larger vehicles - represent a significant policy lever to drive market transformation. This could accelerate the transition to electric vehicles in commercial fleets, potentially leading to faster-than-expected market growth for companies like Vicinity.

However, it's important to consider the long-term sustainability of such incentives. As the EV market matures and costs decrease, there may be pressure to reduce or phase out these credits. Investors should monitor policy discussions and be prepared for potential changes in the incentive landscape that could affect demand dynamics in the future.

Furthermore, this policy could trigger increased competition in the commercial EV space, potentially attracting new entrants or spurring increased investment from established players. Vicinity will need to maintain technological competitiveness and operational efficiency to capitalize on this opportunity fully.

Tax Credits include up to $7,500 for VMC 1200 and up to $40,000 for Lightning Electric Transit Bus Purchases

VANCOUVER, BC / ACCESSWIRE / July 25, 2024 / Vicinity Motor Corp. (NASDAQ:VEV)(TSXV:VMC) ("Vicinity" or the "Company"), a North American supplier of commercial electric vehicles, today announced that its customers can now receive up to $7,500 tax credit toward the purchase of the VMC 1200 Class 3 Electric Truck and up to $40,000 for the Vicinity Lightning electric transit bus.

This opportunity arises after approval from the United States Internal Revenue Service ("IRS") as a "qualified manufacturer" for the Commercial Clean Vehicle Credit. The Commercial Clean Vehicle Credit ("45W tax credit"), as defined in §30D(d)(3) of the Internal Revenue Code, provides credits for qualifying vehicles purchased by businesses and tax-exempt organizations as part of the Inflation Reduction Act of 2022. There is no limit on the number of credits a business can claim. Vicinity will be listed as a Qualified Manufacturer on the IRS Qualified Manufactured index. Additional information on commercial clean vehicle tax credit can be found on IRS.gov.

"The Commercial Clean Vehicle Credit specifically targets vehicles like our VMC 1200 and Vicinity Lightning with incentives to encourage organizations and businesses to electrify their fleets," said Brent Phillips, President of Vicinity Motor Corp. "With the growth of our distribution network targeting commercial and fleet customers in the U.S., this is an additional way to attract attention and lower costs for new buyers who are considering making the transition to EVs for their business."

Ronnie Garcia, Grant & Government Relations Manager of Vicinity Motor Corp, added: "The 45W tax credit from the Inflation Reduction Act of 2022 is a significant advantage for our customers, providing substantial financial incentive for adopting our electric Class 3 truck and our Lightning transit bus. This tax credit not only makes our electric vehicles more accessible but also greatly reduces the total cost of ownership, allowing businesses and transit agencies to enjoy the benefits of lower operating costs and maintenance expenses. At Vicinity Motor Corp. we're proud to offer innovative, sustainable transportation solutions that are now more attractive and cost-effective thanks to this historic piece of legislation."

About Vicinity Motor Corp.

Vicinity Motor Corp. (NASDAQ:VEV) (TSXV:VMC) ("VMC") is a North American supplier of electric vehicles for both public and commercial enterprise use. The Company leverages a dealer network and close relationships with world-class manufacturing partners to supply its flagship electric, CNG and clean-diesel Vicinity buses, as well as the VMC 1200 electric truck to the transit and industrial markets. For more information, please visit www.vicinitymotorcorp.com.

Company Contact:
Ronnie Garcia
Grant & Government Relations Manager
310-662-3742
ronnie.garcia@vicinitymotor.com

Investor Relations Contact:
Lucas Zimmerman
MZ Group - MZ North America
949-259-4987
VMC@mzgroup.us
www.mzgroup.us

Neither the TSX-V nor its Regulation Service Provider (as that term is defined in the policies of the TSX-V) accepts responsibility for the adequacy or accuracy of this release.

Cautionary Note Regarding Forward-Looking Statements

This press release includes certain "forward-looking information" and "forward-looking statements" (collectively "forward-looking statements") within the meaning of applicable securities laws. All statements, other than statements of historical fact, included herein are forward-looking statements. Forward-looking statements are frequently, but not always, identified by words such as "expects", "anticipates", "believes", "intends", "estimates", "potential", "possible", and similar expressions, or statements that events, conditions, or results "will", "may", "could", or "should" occur or be achieved. Forward-looking statements involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements.

Important factors that could cause actual results to differ materially from Vicinity's expectations include uncertainties relating to the economic conditions in the markets in which Vicinity operates, vehicle sales volume, anticipated future sales growth, market prices and supply for parts and materials, the success of Vicinity's operational strategies, the vehicle assembly facility in the State of Washington being capable of operating in the manner intended by management, the effect of the COVID-19 pandemic, the recoverability of the Optimal intangible asset and other macro economic factors on supply chain recovery to pre-pandemic levels, related government-imposed restrictions on operations, the success of Vicinity's strategic partnerships, the ability of the Company to extend or modify existing debt terms; and other risk and uncertainties disclosed in Vicinity's reports and documents filed with applicable securities regulatory authorities from time to time. Vicinity's forward-looking statements reflect the beliefs, opinions and projections on the date the statements are made. Vicinity assumes no obligation to update the forward-looking statements or beliefs, opinions, projections, or other factors, should they change, except as required by law.

SOURCE: Vicinity Motor Corp.

View the original press release on accesswire.com

FAQ

What tax credits are available for Vicinity Motor Corp's electric vehicles?

Customers can receive up to $7,500 tax credit for the VMC 1200 Class 3 Electric Truck and up to $40,000 for the Vicinity Lightning electric transit bus under the U.S. IRS Commercial Clean Vehicle Credit.

Is there a limit on the number of tax credits a business can claim for VEV vehicles?

No, there is no limit on the number of credits a business can claim for eligible Vicinity Motor Corp (VEV) vehicles under the Commercial Clean Vehicle Credit program.

What is the purpose of the Commercial Clean Vehicle Credit for Vicinity Motor Corp (VEV)?

The Commercial Clean Vehicle Credit aims to incentivize organizations and businesses to electrify their fleets by providing tax credits for the purchase of electric vehicles like the VMC 1200 and Vicinity Lightning.

How does the tax credit affect the cost of ownership for VEV electric vehicles?

The tax credit significantly reduces the total cost of ownership for Vicinity Motor Corp (VEV) electric vehicles, making them more accessible and cost-effective for businesses and transit agencies.