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GM wants U.S. Treasury to reconsider tax credits for Cadillac Lyriq EV

Reuters · 01/06/2023 17:48
GM wants U.S. Treasury to reconsider tax credits for Cadillac Lyriq EV

By David Shepardson

- General Motors GM.N said Friday it wants the U.S. Treasury to reconsider classification of GM's electric Cadillac Lyriq to allow it to qualify for federal tax credits.

The Treasury and Internal Revenue Service did classify the Lyriq as an SUV, meaning its retail price cannot be above $55,000 to qualify for up to $7,500 in federal tax credits. The Lyriq currently starts at $62,990. SUVs can be priced at up to $80,000 to qualify, while cars, sedans and wagons can only be priced at up to $55,000.

"We are addressing these concerns with Treasury and hope that forthcoming guidance on vehicle classifications will provide the clarity to consumers and dealers, as well as regulators and manufacturers," GM told Reuters Friday, adding Treasury should use criteria and processes similar to the Environmental Protection Agency and Energy Department. "This drives consistency across existing federal policy and clarity for consumers."

GM delivered just 122 U.S. Lyriq vehicles in 2022. Treasury did immediately comment.

Legislation approved by Congress in August reformed the EV tax credit and lifted the 200,00-vehicle per manufacturer cap that had made Tesla TSLA.O and GM ineligible for EV tax credits effective Jan. 1.

Tesla Chief Executive Elon Musk tweeted this week the EV tax rules were "messed up." The five-seat version of the Tesla Model Y is considered an SUV, while the Model Y seven-seat version is and can qualify for the credit.

The Volkswagen VOWG_p.DE ID.4 is classified as an SUV, while the all-wheel drive version is, the IRS said. VW declined comment Friday.

Last month, Treasury said it would delay until March releasing proposed guidance on required sourcing of EV batteries. This means some EVs that do meet the requirements have a brief window of eligibility for the full $7,500 tax credit before battery rules take effect.

(Reporting by David Shepardson; Editing by David Gregorio)

((David.Shepardson@thomsonreuters.com; 2028988324;))