A Tesla Model Y on show inside a Tesla retailer on the Westfield Culver City shopping center in Culver City, California, U.S., on Thursday, April 14, 2022.
Bing Guan | Bloomberg | Getty Images
DETROIT – The U.S. Treasury mentioned Friday it’s altering its definition of an “SUV” to make extra electrical automobiles from Tesla, General Motors and different automakers eligible for as much as $7,500 federal tax credit at larger costs.
The determination follows Tesla CEO Elon Musk publicly criticizing the previous requirements in addition to automakers corresponding to GM and Ford Motor lobbying to change the rules forward of ultimate guidelines being introduced subsequent month.
The change raises the retail worth cap to $80,000 from $55,000 for automobiles such because the Tesla Model Y, Cadillac Lyriq, Ford Mustang Mach-E and Volkswagen’s ID.4. Previously some or all fashions of those automobiles didn’t qualify as a result of they did not weigh sufficient to be thought of an SUV by the Treasury’s requirements.
The credit are a part of the Biden administration’s $437 billion Inflation Reduction Act, which was permitted in August. Under the invoice, SUVs could be priced at as much as $80,000 to qualify for EV tax credit, whereas vehicles, sedans and wagons must be priced at or below $55,000.
It’s unclear how the choice will impression as much as 20% pricing cuts introduced by Tesla final month that made the Model Y eligible for the credit. Tesla didn’t instantly reply for remark.
GM, in an emailed assertion, thanked the Treasury and hailed the modifications: “The alignment on classification will provide the needed clarity to consumers and dealers, as well as regulators and manufacturers.”
The Alliance for Automotive Innovation, a lobbying group for many automakers working within the U.S., additionally counseled the choice.
–CNBC’s Chelsey Cox contributed to this text.
