There are some odd vehicle classifications going on in the depths of the Internal Revenue Service (IRS). In short, the US government may not feel the way you do about your Ford Escape or Cadillac Lyriq. And if you’re looking to buy a Lyriq, that could be a costly distinction.
This was recently illustrated by the new 2023 $7,500 EV Tax Credit available on select electric and hybrid vehicles. Of course restrictions apply and the big one is whether you drive an SUV, truck, van or “other” vehicle. That’s because SUVs and the like must have an MSRP of $80,000 or less to qualify. Others, however, have a significantly lower MSRP limit of $55,000.
Read the IRS website and you’ll find plenty of information about the tax credit, including a list of vehicles that might qualify. The IRS also lists the applicable MSRP limits for each model, which conveniently shows how the Feds categorize them. It should come as no surprise to you that a Jeep Grand Cherokee 4xe is an SUV, a Ford F-150 Lightning is a truck, and a Nissan Leaf is, uh, other.
But with some models that should be a no-brainer, things aren’t that simple. the Ford Escape PHEV is listed at the low $55,000 mark, despite the fact that it’s an SUV in the eyes of pretty much everyone. the Lincoln Corsair is also taken into account otherbut the Chrysler Pacifica has an SUV limit of $80,000. the VW ID.4 lives in both worlds, according to Uncle Sam, depending on whether he’s equipped with four-wheel drive. It’s even more bizarre Tesla Model Y – but classed as a seven-seat SUV other in five-person configuration.
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For the most part, the classifications don’t matter, but then you have them Cadillac Lyriq. It’s billed as an SUV; It has the general shape and higher ride height of an SUV. But the IRS doesn’t consider it an SUV, and as such it’s subject to the $55,000 MSRP limit. Meanwhile, the Lyriq starts just north of $60,000, exempt from a not inconsiderable tax cut on what seems like a technicality. Cadillac is obviously not very happy about it. A company spokesman said Reuters that concerns about vehicle classifications were brought to the US Treasury Department.
Concerns include the fact that the US Environmental Protection Agency – another US official agency – classifies the Lyriq as an SUV.
