Personal News
On Friday, the Treasury Department updated how it classifies vehicles eligible for its $7,500 electric vehicle tax credit under the Inflation Reduction Act (IRA). The change should allow more vehicles — including the Model Y — to qualify for the credit, as it no longer puts some SUV crossovers in the same category as sedans.
Previously, some Model Y models, alongside the Cadillac Lyriq, were ineligible for the EV tax credit because their sticker prices exceeded the maximum suggested retail price of $55,000 for sedans.
But now that the government is using the Environmental Protection Agency’s (EPA) fuel economy labeling standard instead of the company’s average fuel economy (CAFE) standard EPA classifies vehicles, the Model Y and the Cadillac Lyriq now fall under the SUV category. This gives Tesla more pricing wiggle room, as vehicles in this category can cost up to $80,000 to qualify for the tax credit.
However, it remains unclear how the Treasury Department’s list of qualified vehicles will change in March. That’s when the agency is expected to issue its guidelines on how to apply the IRA’s strict rules around the sourcing and manufacturing of minerals and battery components used in electric vehicles.
