One of the many motivators for consumers to turn towards an electric vehicle is the Federal EV tax credit, which proposes up to a $7,500 credit with the purchase or leasing of a qualified vehicle. Recently, the U.S. Treasury and IRS released new guidance on the federal tax credit, and the Cadillac Lyriq was one of many vehicles to receive a strange classification.
According to a report from Reuters, the U.S. Treasury qualified the Cadillac Lyriq as a passenger vehicle, rather than a utility vehicle. This means that the Lyriq’s retail price cannot cross the $55,000 mark if it were to qualify for the Federal EV tax credit. As it stands, the 2023 Lyriq currently has a starting price of roughly $60,000.
“We are addressing these concerns with Treasury and hope that forthcoming guidance on vehicle classifications will provide the needed clarity to consumers and dealers, as well as regulators and manufacturers,” GM was quoted as saying. The Detroit-based automaker continued, stating that the U.S. Treasury should use the same criteria and processes the EPA and Energy Department use, “This drives consistency across existing federal policy and clarity for consumers.”
Fuel economy standards “are pre-existing – and longstanding – EPA regulations that manufacturers are very familiar with. These standards offer clear criteria for delineating between cars and SUVs,” a U.S. Treasury spokesperson was quoted as saying in response.
It’s worth noting that the Cadillac Lyriq isn’t the only vehicle with a seemingly out-of-place classification. The Ford Mustang Mach-E, Ford Escape PHEV and Lincoln Corsair PHEV were also qualified as passenger vehicles. The Tesla Model Y with a five-seat configuration isn’t a utility vehicle, but becomes one when optioned as a seven-seater. Additionally, the Volkswagen ID.4 is classified as a utility vehicle only when equipped with AWD.
GM has reached out to the U.S. Treasury to reconsider its decision. As it stands, the Chevy Bolt EV and Bolt EUV would be the only GM vehicles to qualify for the full $7,500 Federal tax credit under these current classifications.
Subscribe to GM Authority for more GM EV news, GM-related politics news and around-the-clock GM news coverage.
Comments
GM says Treasury should use the same criteria as the EPA, and Treasury says they are. So who is correct? What’s an auto journalist for?
You can bet GM designed the Lyriq to get the full credit. If the govt changes the rules (or wrote ambiguous ones), it should be grandfathered in, if we’re still allowed to use that word in connection with Cadillac.
They point to the same definitions and guidelines, but the EPA rules are granted to leeway to classify a vehicle under what they feel most consumers would shop for it under.
But it’s good to see people realize most of these “crossover” things are not actually SUVs.
The treasury is correct in its determinations. But honestly, it’s the automakers that have to submit the paperwork to the IRS, so I’m sure it’s GM lawyers that realized the Lyriq isn’t an SUV per the rules.
“ the Cadillac Lyriq was one of many vehicles to receive a
strangeproper classification.”FIFY.
Not wanting to debate whether the Lyriq should or shouldn’t be considered an SUV or not. But it’s my understanding that the Hyundai ioniq5 and Kia EV6 both qualify despite having less space, lower ground clearance but weigh more.
Considering this, I totally get the concern. And if the classification doesn’t change, manufacturers will simply add more weight to their SUVs to get across that weight threshold in order to qualify.
Ultimately the qualifications are flawed and they need to reconsider how the calculations are made to eliminate such discrepancies.
They don’t qualify for the tax credit because they are not made in North America.
But the EPA has the IONIQ 5 classified as a large car, and I think the EV6 as a small station wagon.
Why do people downvote facts?
“ and hope that forthcoming guidance on vehicle classifications will provide the needed clarity to consumers and dealers, as well as regulators and manufacturers,”
The IRS did that. Using long standing definitions in the various codes. They published Notice 2023-1
https://www.irs.gov/pub/irs-drop/n-23-01.pdf
“A vehicle’s vehicle classification is to be determined consistent with the rules and definitions provided in 40 CFR 600.002 for vans, sport utility vehicles, and pickup trucks.”
Pickup truck means a nonpassenger automobile which has a passenger compartment and an open cargo bed.
Sport utility vehicle (SUV) means a light truck with an extended roof line to increase cargo or passenger capacity, cargo compartment open to the passenger compartment, and one or more rear seats readily removed or folded to facilitate cargo carrying.
Van means any light truck having an integral enclosure fully enclosing the driver compartment and load carrying compartment. The distance from the leading edge of the windshield to the foremost body section of vans is typically shorter than that of pickup trucks and SUVs.
Non-passenger automobile has the meaning given by the Department of Transportation at 49 CFR 523.5. This term is synonymous with “light truck.”
Light truck means an automobile that is not a passenger automobile, as defined by the Secretary of Transportation at 49 CFR 523.5. This term is interchangeable with “non-passenger automobile.” The term “light truck” includes medium-duty passenger vehicles which are manufactured during 2011 and later model years.
So regardless of van, SUV, or pickup, they have to meet the light truck definition in 49 CFR 523.5.
Per 49 CFR 523.5, to be considered a “light truck” it has to meet either criteria in (a) or (b).
(a) An automobile designed to perform at least one of the following functions:
(1) Transport more than 10 persons;
(2) Provide temporary living quarters;
(3) Transport property on an open bed;
(4) Provide greater cargo-carrying than passenger-carrying volume, such as in a cargo van; or
(5) Permit expanded use of the automobile for cargo-carrying purposes or other nonpassenger-carrying purposes through folding or removing a 3rd row of seats to create a flat cargo floor.
OR
(b) An automobile capable of off-highway operation, as indicated by the fact that it:
(1) Has 4-wheel drive or Is rated at more than 6,000 pounds gross vehicle weight;
and
(2) Has at least four of the following characteristics:
(i) Approach angle of not less than 28 degrees.
(ii) Breakover angle of not less than 14 degrees.
(iii) Departure angle of not less than 20 degrees.
(iv) Running clearance of not less than 20 centimeters.
(v) Front and rear axle clearances of not less than 18 centimeters each.
I don’t know why so many supposed automotive journalists can’t include this information in these articles.
The only good news is that GM has to lower Lyriq prices as soon as the other battery plants are producing for the Lyriq thus lowering battery prices, and lowering Lyriq profuction cost. Then it can gain more sales and continue to lower cost.
That’s what happens when you let the government pick winners and losers. Contributions to election campaigns will will help set the standard.
Average hard-working Americans should not be forced to subsidize rich Americans purchase of EVs! That is simply a wealth transfer from average Americans to rich Americans. The subsidies should be cancelled. If EVs are so wonderful, as the promoters claim, they will succeed in the marketplace on their own without tax credits, as ICE powered vehicles do. Economics 101. Too bad for us that nearly all politicians have no use for and little understanding of basic economics.
I agree – I do not think there should be tax credits for buying an electric vehicle. Who thought that was a great idea?
Environmental extremists and politicians pandering for donations and votes.
I agree that vehicle classifications should be the same across all organizations. Trucks and cars have different criteria by which they are governed. For example, trucks and cars have different safety standards. Trucks and cars have different fuel standards. Is a SUV/CUV a truck or a car? It would be helpful if the author of this article explained these differences and who is the authorizing organization so we all have the same understanding of what a truck is and what a car is.
Lyric sales were just cut by more than 50%. The 2024 Chevy Blazer EV is not on the list yet. Maybe it will be classified as an SUV. This is a threat to democracy. LOL.
These are the same kinds of rules that allowed SUVs to be classified as trucks by the EPA but registered as cars in most states. El Caminos got truck license plates while Suburbans got car tags. Because they have back seats?
The government should simply give a $7,500 REBATE for any EV that sells for $40,000 or less to promote reducing CO2 and help the lower middle and middle class afford them. Forget about tax credits which only the rich can take advantage of.
If the root intent is to address global warming, EV subsidies are probably the least efficient way to spend tax dollars.
“Global warming”? Now a days they call it Climate Change. They had to change the name Since Global Warming was disproved.
When I was young (the ’70s) it was called “Global Cooling” and the coming of the next Ice Age. Then “Acid Rain”, then “Ozone Hole”, then “Global Warming”, and now “Climate Change”.
As Roseanne Roseannadanna brilliantly commented, “It’s always something!”
I don’t remember “Global Cooling,” but I do remember talk of another ice age. Climate change is here to stay. I witnessed it myself. Yesterday it rained and today it hasn’t rained. 😊
Eric: It was changed from “Global warming” to “Climate Change” because there were too many ill-informed people out there who would attempt to disprove it when temps got cold. Climate change perfectly fits as the world is going through man made issues in which summers are getting more hot (proven fact), winters are getting worse in areas where it normally wouldn’t (proven), droughts are getting worse (proven), hurricanes are intensifying (proven), 100 year rains/floods are becoming an annual thing (proven) and the ice caps are shrinking faster than ever in history (again, proven).
So the longer people like you deny proven facts and keep living like everything is peachy, the faster it happens.
Dan I had thought that you were someone who thought for themselves. Disappointed to see that you are just a kool-aid drinker.
Patrick, Like a Rock and others: It would be easy to comment here and revert to bashing you all for your lack of this subject outside of what the right wing in this country tells you. Instead, I will challenge you all to learn about this outside the norms that you “hang” with. Do some research. Watch some documentaries. Read, if just a few short paragraphs, from the many world-wide studies that have been done over the past 2 or 3 decades. Don’t take my word for all this, please. I beg you all to do that research and find out for yourself. And in that same sense, stop listening to the same crowd of deniers and see what YOU find.
I see where a lot of people on here posture themselves firmly on one side or the other. I don’t do that and will not start now. I fully understand that EV’s are not the final answer and understand the challenges we all face with them. However, don’t kid yourself either. ICE is also not the way to keep going. When the anti EV people on here begin to point out how bad batteries and the materials are to make them, do they look at the other side as well? How about the materials to make the millions of catalytic converters? What about the billions of gallons of motor oil being drained every year? The increased amount of anti-freeze? The multitude of other materials that ICE used where EV’s don’t or use way less? How often have you brought that up? I could go on, but the point is there and I truly ask others to be open minded and research this on your own and stop listening to the wrong people.
As I’ve clearly stated before. EV alone is not the fix for this and yet ICE only is also not. Changing how we drive, the amount of wasteful trips we take, how fast we drive, letting our cars sit and idle for no reason, keeping our vehicles properly maintained, etc. These are just a few things we can all do to help without giving up what we all seem to enjoy. But to just turn our heads and deny reality will only work for a short time more. Do the research for yourself and your family if for nothing else.
You see, there is the problem with climate change. I have researched it and I have a lot of questions. The questionable science is always answered with “you are a denier” and I’m sorry but that’s not a answer. If climate change science is so strong and (proven) then why not welcome the normal scientific process, whats’ to hide? You also should do some research, starting with the whole 97% of scientist are in agreement CC is real and man made slogan. It is not anywhere near true and a fabrication by politicians. Computer models which all of the dire predictions are based on are notoriously inaccurate. When past data is input they do not even show what is currently happening, let alone accurately predict the future. . To demonstrate that weather events have become more severe require the CC alarmist to have to seriously cherry pick the data. Calling those who question CC deniers and silencing them in the media demonstrates paranoia and disregard for scientific process. BTW from the latest COP27 meetings it seems the developing countries have given up on fixing CC and are now only demanding reparations. This whole thing couldn’t be just abort money, could it?
Patrick: I don’t know how to respond because I’m not trying to insult anyone or push any agenda. What I can say is that I have family who are hardcore Fox news people. I do my best to avoid any deep conversations with them on many topics as I constantly hear them repeating almost the exact things Fox claims. In my experience, as limited as it probably is, I’ve also found that people who feel that making changes to help environmentally will oppose those changes if it means they may have to give up some of the things they like. So it becomes easier to just look the other way and continue on as if.
I can also say that in my 55 years on earth, I’ve witnessed weather changes that seem to confirm (IMO) what the scientists and environmentalist are saying. Lastly, I don’t watch a lot of TV, but when I do it’s often the PBS channels and enjoy the documentaries. Lastly, my faith is based in the Catholic church and our current Pope teaches that it’s our duty to change our ways for the sake of the planet.
Bottom line is that I’m doing what I can to help while teaching my children to think about the earth in ways that I didn’t growing up.
Today’s misinformation is tomorrow’s fact.
Why have 2 different MSRP price points for the tax credit based on vehicle type? Should just be one tax credit regardless.
I don’t want to get into this argument; but Climate Change that is occurring is actually something that increases Volatility; not just an increase warmer temperature. A good example of this is California where they were in a severe drought. Now, in 2023, they have way too much water.
So tired of the snivelling going on over government mandated EVs. Let EVs compete with the balance of the market and see where it ends. We don’t even have adequate infrastructure to support the mandates and our governments know that.
Why doesn’t it have AWD again?
While I agree they should use the same metrics as the EPA…..Treasury is right. This is not a utility vehicle. It’s 2 wheel drive and seats 4 (5 in a pinch). It has no trailer hitch too.
Have been saying this since day one.
The lyriq is just a hatchback, hence a passenger car.
Not a cuv nor a suv.
Period.
Lets start with scrapping ALL EV Tax credits. We shouldn’t be handing out Taxpayer money for someone to purchase a vehicle.
Exactly!
Let the market determine price, not government subsidy. $7500 give away sure doesn’t help the deficit.
Yeah. Let’s remove oil and gas subsidies. Make oil companies pay for their own security services instead of using our military to protect oil supplies and trade routes, raise the gas tax that hasn’t been raised in 30 years, tack on a carbon tax to account for healthcare costs related to burning gasoline. Stop giving oil and gas companies massive discounts on land/sea leases that are below market value.