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GM Lobbies U.S. Treasury To Give the Cadillac Lyriq 'SUV Status' for Tax Credit Purposes

General Motors is not happy with the way the U.S. Treasury and the Internal Revenue Service (IRS) have gone about identifying which electric vehicles are eligible for tax credits and which ones are not.
2023 Cadillac Lyriq 10 photos
Photo: Edmunds.com
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The company's Cadillac Lyriq currently starts at an MSRP of $62,990 which is well beyond the $55,000 threshold set by the agencies for passenger cars, sedans, and wagons. As of now, the Lyriq is not considered to be an SUV therefore, buyers will not be eligible for the up to $7,500 tax credit.

GM issued a statement on Friday that it wants the Treasury to reconsider the Lyriq's status and be reclassified as an SUV. SUV's up to a sales price of $80,000 are eligible for the tax credit.

"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 told Reuters Friday.

The Treasury seemed to acknowledge the shortcomings of their classification process with the U.S. Energy Secretary Jennifer Granholm stating, "We're working in a very interlocked way. Our folks and their folks are talking all the time," to Automotive News following her CES address.

From GM's perspective, the Treasury should use the same criteria in determining the classification of vehicles as the Environmental Protection Agency (EPA) uses to promote consistency across federal policy and bring clarity to consumers.

The Treasury responded through a spokesperson by stating the fuel economy standards used by the agency "which are pre-existing -- and longstanding -- EPA regulations that manufacturers are very familiar with. These standards offer clear criteria for delineating between cars and SUVs."

The industry has been scratching their collective heads after the agencies released a list of specific models of vehicles that would be eligible for the tax credit just days ago. After learning the 5-seat variant of the Model Y is not classified as an SUV and did not make the list, while the 7-seat Model Y is and does qualify, Elon Musk tweeted this week the EV Tax criteria rules are "messed up."

The Inflation Reduction Act that passed in August and went into effect on January 1, has the whole industry scrambling to understand the tax credit issue and issues related to battery content of EVs sold in the U.S.

However, the act did throw mass-market manufacturers such as GM and Tesla a bit of a bone. The 200,000 per year cap on electric vehicle sales that would have made both companies' EVs ineligible, was lifted.

Domestically-sourced EV battery content mandates are even more complicated, have yet to be thoroughly defined, and have automotive companies on edge. The Treasury has said that it will delay releasing specifics on the matter until March.
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