The Cadillac Lyriq luxury EV crossover now qualifies for a federal clean vehicle tax credit following updated vehicle classification standards from the U.S. Treasury Department.
The U.S. Treasury Department released the updated classification standards earlier Friday. The standards are used to determine the applicable MSRP limitation for EV tax credits available under the Inflation Reduction Act.
Going forward, the U.S. Treasury Department has updated the qualifications to now follow the consumer-facing EPA Fuel Economy Labeling standard, rather than the EPA CAFE standard used previously.
“This change will allow crossover vehicles that share similar features to be treated consistently,” the U.S. Treasury Department states. “It will also align vehicle classifications under the clean vehicle credit with the classification displayed on the vehicle label and on the consumer-facing website FuelEconomy.gov.”
Previously, the qualification standards were based on existing EPA CAFE standards with regard to determining whether a vehicle was classified as a sedan, SUV, or some other type of vehicle. The classification was critical in that different classifications are tied to different MSRP limitations, with cars limited at $55,000, and utility vehicles limited at $80,000.
This is particularly impactful for the Cadillac Lyriq, which now qualifies for an EV tax credit under the updated classification standards. Prior to the update, the Cadillac Lyriq, which starts at around $60,000, did not qualify for a clean vehicle credit.
Customers who purchased and placed into service vehicles since January 1st, 2023 that qualify for the credit under the new EPA Fuel Economy Labeling classification standards, while also satisfying all other related requirements, can now claim the credit. All vehicles that were eligible under the MSRP limitations in place prior to the updated standards remain eligible.
Qualifying vehicles, including the Cadillac Lyriq, are eligible to receive upwards of $7,500 in federal tax credit with a new vehicle purchase or lease.
The U.S. Treasury Department states that it will release subsequent guidance on production requirements, including minerals and batteries, in March. Under the Inflation Reduction Act, qualifying EVs must meet requirements for production location and material sourcing.
As a reminder, the Cadillac Lyriq rides on the GM BEV3 platform, with production taking place at the GM Spring Hill plant in Tennessee. GM Ultium batteries and GM Ultium drive motors provide the motivation.