In the eye of the law, the Cadillac Lyriq is not an SUV. Ordinarily, that wouldn’t matter; given its two-box shape, ample seating for five plus cargo space, seven inches of ground clearance and 5,600-pound curb weight, we know its an SUV, even if it’s not classified as such. Yet semantics are standing in the way of the most important Cadillac in decades being eligible for the full $7,500 tax credit for electric vehicles. And General Motors is asking the U.S. Treasury to do something about it.
As you may already know, the new regime of EV credits stipulates that only passenger cars that cost less than $55,000 are eligible for discounts, while that cap is raised to $80,000 for SUVs, vans and trucks. The Lyriq begins at $62,990 including destination, but because it isn’t technically an SUV per the government’s antiquated definition, it’s too expensive to qualify, as Reuters reported Friday. You can imagine GM isn’t pleased with this outcome, which is precisely why the company’s been pestering the Treasury to amend its criteria with some common sense:
“We are addressing these concerns with Treasury and hope that forthcoming guidance on vehicle classifications will provide the needed clarity to consumers and dealers, as well as regulators and manufacturers,” GM told Reuters Friday.
U.S. Energy Secretary Jennifer Granholm said at CES late Friday that her agency is working on tax classification issue with Treasury.
“We’re working in a very interlocked way. Our folks and their folks are talking all the time,” Granholm told Automotive News following her CES address. “Our policy office is working directly with Treasury to make sure that this guidance is out and it’s informed by stakeholders.”
Of course, GM isn’t the only EV maker facing this. Certain versions of the Tesla Model Y, Volkswagen ID.4 and Ford Mustang Mach-E also fall wide of SUV designation because they have too few seats, or weigh too little (under 6,000 pounds) or are only front-wheel drive. The Lyriq misses on all of those fronts, even though it rides almost 1.5 inches higher than the Mach-E, is nearly a foot longer and four inches wider. All-wheel-drive, dual motor examples of the Lyriq are set to begin deliveries later this year, but those supposedly don’t pass the arcane SUV sniff test, either.
There’s something painfully ironic about certain emissions-free vehicles being spared discount eligibility specifically because they’re not heavy or inefficient enough. Limiting what vehicles qualify based on MSRP makes a lot of sense; nobody buying a $120,000 Lucid Air needs a $7,500 break. But excluding particular crossovers based on arbitrary, antiquated criteria does nobody any good, when these are ultimately the cars the vast majority of people are buying. As you’d figure, the Treasury doesn’t quite see it that way:
A Treasury spokesperson defended the classifications, saying the agency used fuel economy standards “which are pre-existing — and longstanding — EPA regulations that manufacturers are very familiar with. These standards offer clear criteria for delineating between cars and SUVs.”
The fact the regulations have been “longstanding” hurts the Treasury’s argument if anything, considering they were drawn up decades before automakers ever seriously considered selling cars without internal-combustion engines to the public. Given that, it’s hard to imagine the EPA ever ratifying sweeping changes to its classifications; an exception might be the best GM can hold out for.