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.