Unfortunately, Tesla Model Y and Mustang Mach-E did not qualify for the new $7,500 federal tax credit for electric vehicles, according to Electrek.
The US Treasury recently announced the official list of qualified EVs for the new $7,500 tax credit. Notably, the Biden Administration will implement this program under the Inflation Reduction Act in 2023.
Discrepancies
It is essential to note the type of vehicle because it establishes the tax credit eligibility’s price limit. Additionally, Electrek has mentioned in their previous report that the list of electric cars, precisely that of the eligibility of SUVs, released by the US Treasury had some discrepancies.
Compared to vehicles with an MSRP of $55,000, SUVs and pickup trucks have a higher MSRP limit of $80,000. Furthermore, their report also noted that the IRS list did not consider Tesla Model Y and Ford Mustang Mach-E as SUVs.
The VW ID.4 made it to the IRS list and was considered an SUV, gaining the tax credit benefit despite having the same size as Model Y and Mach-E. Additionally, the VW ID.4 is eligible for tax credit for a price of up to $80,000.
What is considered an SUV by the IRS?
IRS seems only to consider a vehicle an SUV based on the vehicle’s Gross Vehicle Weight Rating (GVWR). For IRS, a car must be over 6,000 lbs to be qualified as an SUV. However, the IRS might have other deciding factors that the general public or even the automakers are not fully aware of.
With these things confusing the public, especially the EV enthusiasts’ community, it is difficult to fully grasp this tax credit. It goes against the purpose of having EVs in the first place. This program’s initial goal was to promote efficient EV sales.
However, with the discrepancies in the weight, it is hard to say what the goal means. The report stated that vehicles with lighter weights are more efficient. Compared to Tesla Model Y and Ford Mustang Mach-E, many SUVs have less cargo space that made it to the IRS list, like the BMW X5 plug-in and Jeep Wrangler plug-in.
To understand the issue from a general standpoint, according to Electrek, the US government is taking action by accepting public comments and petitions for revising some points on the new rule.
