A Tesla Model Y on display inside the Tesla Store at Westfield Culver City Shopping Mall in Culver City, California, US, Thursday, April 14, 2022.
Bing Guan | Bloomberg | Getty Images
Detroit – US Treasury said friday It’s changing its definition of “SUV” to make more electric vehicles than Tesla, General Motors And other automakers are eligible for a $7,500 federal tax credit on the higher prices.
the decision is as follows Tesla CEO Elon Musk publicly criticizes former standards as well as GM and automakers ford motor lobbying to change the guidelines ahead of final rules to be announced next month.
The change increases the retail price limit for vehicles such as the Tesla Model Y, Cadillac Lyric, and more from $55,000 to $80,000. Ford Mustang Mach-E and Volkswagen’s ID.4. Previously some or all models of these vehicles did not qualify because they did not weigh enough to be considered SUVs by Treasury’s standards.
The credits are part of the Biden administration’s $437 billion inflation reduction act, which was approved in August. Under the bill, SUVs can cost up to $80,000, while cars, sedans and wagons must cost $55,000 or less to qualify for the EV tax credit.
It is unclear how long the decision will affect 20% off pricing announced by Tesla last month that made the Model Y eligible for the credit. Tesla did not immediately respond to comment.
GM, in an emailed statement, thanked Treasury and praised the changes: “The alignment on classification will provide needed clarity to consumers and dealers, as well as regulators and manufacturers.”
The Alliance for Automotive Innovation, a lobbying group for most automakers operating in the US, also applauded the decision.
—CNBC’s Chelsea Cox contributed to this article.