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The Treasury Department said Friday it is making more electric vehicles – including SUVs made by Tesla, Ford and General Motors – eligible for tax credits of up to $7,500 under new vehicle classification definitions.
The revised standards for EV tax credits follow lobbying by automakers that had pressed the Biden administration to change vehicle definitions to allow higher priced vehicles to qualify. Tesla CEO Elon Musk met with top aides to President Joe Biden last week to discuss the EV industry and the broader goals of electrification.
Under the sweeping climate law approved last summer, pickup trucks, SUVs and vans with a sticker price up to $80,000 qualify for EV tax credits, while new electric cars, sedans and wagons can only be priced up to $55,000. The rule had disqualified some higher-priced EVs, prompting complaints from Tesla and other automakers.
Ford and market leader Tesla both said in recent weeks that they are cutting prices on some EVs, in part to qualify for the new federal tax credit and spur buyer interest.
The EV tax credits are among a host of changes enacted in the Inflation Reduction Act, which Congress approved in August with only Democratic votes. The law is designed to spur EV sales as part of a broader effort to reduce planet-warming greenhouse gas emissions.
But a complex web of requirements, including where vehicles and batteries must be manufactured to qualify, has cast doubt on whether buyers can receive the full $7,500 credit.
