Earlier this year, the Internal Revenue Service (IRS) posted vehicle classifications on its website, regarding the new $7,500 tax credit for 2023 and vehicle MSRP thresholds. This is of course available on some electric and hybrid vehicles.
The list was generally correct except for a few errors, such as the Ford Escape and Cadillac Lyriq classified as non-SUVs. It should be noted that SUVs, trucks and vans must have an MSRP of $80,000 or less to qualify for the tax credit. Other vehicle types have a lower MSRP threshold of $55,000.
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That said, the misclassification hasn’t affected the Escape PHEV, which starts below $40,000. The problem was with the Lyriq EV starting above $60,000, which meant it didn’t qualify for the new tax credit. Cadillac was not very happy about this and took the matter to the US Treasury.
Fortunately, this has already been corrected by the IRS. The SRP classifications of vehicles, which you can access via the source link below, have been revised at the time of this writing. It now shows that the Escape and Lyriq have the 80,000 SUV price threshold.
These are not the only rectifications employed on the list. The Tesla Model Y, which was classified as an SUV with seven seats but “other” as a five-seater, is now under SUV regardless of version.
Meanwhile, the VW ID.4, which was classified as both SUV and “other” based on its drivetrain, is also now classified under the SUV classification, regardless of what trim level and drivetrain you get. .
As far as we are concerned, the revamped vehicle classification on the IRS website is currently correct and as it should be.
However, it should be noted that some manufacturers have not submitted a list of specific eligible models despite entering into a written agreement with the IRS to become a “qualified manufacturer”. These brands include Honda, Hyundai, Jaguar, Kia, Mazda, Mercedes-Benz, Mitsubishi, Polestar, Porsche, Subaru and Toyota.
