Posted on 02/03/2023 12:04:06 PM PST by Red Badger
The U.S. Treasury is changing its definition of an “SUV” to make more electric vehicles from Tesla, General Motors and others eligible for up to $7,500 in federal tax credits at higher prices.
The decision follows Tesla CEO Elon Musk publicly criticizing the former standards as well as GM and Ford lobbying to change the guidelines.
It’s unclear how the decision will affect up to 20% pricing cuts announced by Tesla last month that made the Model Y eligible for the credits.
DETROIT – The U.S. Treasury said Friday it is changing its definition of an “SUV” to make more electric vehicles from Tesla, General Motors and other automakers eligible for up to $7,500 in federal tax credits at higher prices.
The decision follows Tesla CEO Elon Musk publicly criticizing the former standards on Twitter as well as automakers such as GM and Ford Motor lobbying to change the guidelines ahead of final rules being announced next month.
The change raises the retail price cap to $80,000 from $55,000 for vehicles such as the Tesla Model Y, Cadillac Lyriq, Ford Mustang Mach-E and Volkswagen’s ID.4. Previously some or all models of these vehicles did not qualify because they didn’t weigh enough to be considered an SUV by the 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 be priced at up to $80,000 to qualify for EV tax credits, while cars, sedans and wagons have to be priced at or under $55,000.
It’s unclear how the decision will impact up to 20% pricing cuts announced by Tesla last month that made the Model Y eligible for the credits. Tesla did not immediately respond for comment.
Wall Street applauded Tesla’s price reductions but also was concerned that they would start an EV pricing war and pressure margins of other automakers, despite rising commodity costs for the vehicles. Tesla has enjoyed significantly higher profit margin on its EVs compared with traditional automakers.
Ford said Monday it would cut pricing of its Mustang Mach-E by up to $5,900 to better compete with Tesla’s Model Y. That’s despite the company’s overall EV business not currently being profitable, including some Mach-E models selling at a loss for the company.
Ford, in an emailed statement, said Friday officials “sincerely appreciate their consideration and hard work” by the Treasury.
GM also thanked the Treasury and hailed the changes: “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 most automakers operating in the U.S., also commended the decision.
– CNBC’s Chelsey Cox contributed to this article.
So between that and Elon and other EV manufacturers having a price war they should be free pretty soon right?
I still wouldn’t want one
Uncle Sam putting his filthy thumb on the scales....
And they accuse the Republican Party of being the Party for the rich!!
I wonder if this is the reason why Tesla stock is up so much in the last week. Somebody leaked that this was coming.
I wonder how many call options Nancy had?
Hahaha. Party of the working class. Pay up all you chumps so someone buying a brand new electric Cadillac can get a tax break.
I could afford an $80K car but I would not buy one. Very happy with my Honda Fit I bought new a few years ago for $15K.
Why doesn’t he do something useful to boost sales, like BANNING all ICE Vehicles from parking on Federal Property or mandating All federal employee’s exclusively use non carbon emitting transportation for all travel
“All federal employee’s exclusively use non carbon emitting transportation for all travel”
Really? You don’t think the federal government machine moves slow enough already?? LOL!
Just an FYI, many federal vehicles already run on LPG, LNG, hybrid or battery powered
and have for quite some time ....at least on the installation I worked at....I suspect that’s probably the norm.
I know, silly of me to ask.
They just redefined the term ‘SUV’......................
“It’s a beautiful thing, the destruction of words.”
― George Orwell, 1984
These cars are so great we have to pay people to buy them!
Then when the inevitable price inflation happens the EV forums blame it on greed. LOL I ask them why they're surprised since most of them are of the same age group fussin' about their high student loans, the balances of which came from high tuition rates sucking up all the government subsidization for college "education". The same with sky high hospital costs (artificially inflated from all the gubment money).
We are way past the time for ending tax breaks on electric guzzling vehicles.
Tax credits democrat lingo for a carrot on a stick your going to pay for it in the long run.
Some have yet to figure out how much Biden’s $1,400 checks he sent out when he got in office is costing them.
I hate how our government wastes our tax dollars. Paying people to buy cars, paying farmers to create milk and corn, only to destroy the goods. Paying luxury hotels to take in homeless scum. The list goes on and on. All while claiming we need to raise the debt ceiling because the government is out of money.
Stop stealing our tax dollars!
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