WASHINGTON, Jan. 6 — General Motors Co said Friday it wants the U.S. Treasury Department to reconsider the classification of GM’s electric Cadillac Lyriq, making it eligible for federal tax credits.
The Treasury and IRS don’t classify the Lyriq as an SUV, meaning it can’t retail for more than $55,000 to qualify for a federal tax credit of up to $7,500. The Lyriq currently starts at $62,990. SUVs can cost up to $80,000, while sedans, sedans and wagons can cost up to $55,000.
“We are addressing these issues with the Treasury Department and hope that upcoming vehicle classification guidance will provide consumers and dealers, as well as regulators and manufacturers, the clarity they need,” GM told Reuters on Friday.
GM said the Treasury Department should use standards and processes similar to those of the Environmental Protection Agency and the Department of Energy. “This drives consistency in existing federal policy and clarity for consumers.”
GM will deliver just 122 U.S. Lyriq vehicles in 2022. A Treasury spokesman defended the classifications, saying the agency uses fuel economy standards that “have existed — and have long existed — with EPA regulations that manufacturers are very familiar with. These standards provide a clear criterion for distinguishing between sedans and SUVs.”
Legislation approved by Congress in August reformed the EV tax credit and removed the 200,00-vehicle-per-maker cap that made Tesla and General Motors ineligible for EVs starting Jan. 1 tax credit.
Tesla CEO Elon Musk tweeted this week that EV tax rules are “a mess.” The five-seat version of Tesla’s Model Y is not considered an SUV, while the seven-seat version of the Model Y is eligible for the credit.
The IRS says the Volkswagen ID.4 is not an SUV, but the all-wheel-drive version is. VW declined to comment on Friday.
Last month, the Treasury Department said it would delay until March the release of proposed guidance on the procurement needed for electric vehicle batteries. That means some EVs that don’t meet the new requirements have a short eligibility window before the battery rules take effect to qualify for the full $7,500 tax credit.