General Motors said on Friday it wants the U.S. Treasury Department to reconsider the classification of the Cadillac Lyriq, making it eligible for federal tax credits, Reuters reported.
The U.S. Treasury Department and the IRS don’t classify the Lyriq as an SUV, meaning it can’t retail for more than $55,000 to qualify for the federal tax credit of up to $7,500, and while the Lyriq currently starts at $62,990, SUV prices can up to $80,000.
“We are addressing these issues with Treasury and hope that upcoming guidance on vehicle classification will provide the clarity consumers and dealers, as well as regulators and manufacturers, need,” GM said.
GM said the Treasury Department should use standards and procedures similar to those of the Environmental Protection Agency and the Department of Energy, “which promote consistency with existing federal policies and provide clarity to consumers.”
A Treasury spokesman defended its basis for the classification, saying the agency used fuel economy standards that “are pre-existing — and long-standing — EPA regulations that manufacturers are very familiar with. The standard provides clear criteria for dividing sedans and SUVs.”
Legislation approved by Congress in August overhauled the EV tax credit and removed the 200,000-vehicle cap per manufacturer.
Some netizens also questioned the Ministry of Finance’s electric vehicle tax incentives, saying that a car with a gasoline engine and an electric range of only 21 miles received a $7,500 electric vehicle tax incentive, while a pure electric vehicle Model Y with a range of 330 miles No tax benefits. Responding to the tweet, Tesla CEO Elon Musk said the EV tax rules were “a mess.”
The five-seater version of the Tesla Model Y is not considered an SUV by the U.S. Treasury Department, while the seven-seater version of the Model Y is an SUV and can qualify for a credit. Also, Volkswagen’s ID.4 is not classified as an SUV, whereas the all-wheel-drive version is.
Last month, the U.S. Treasury Department said it would delay issuing proposed guidance on purchases needed for electric vehicle batteries until March. That means some EVs that don’t meet the new requirements have a brief chance to get the full $7,500 tax credit before the battery rules take effect.