Kelley Blue Book: The $7,500 question: Is it an SUV, or a car? Ask the IRS.

by | Jan 17, 2023 | Stock Market

The all-electric Cadillac Lyriq has a high-riding position that lets you see over much of traffic from the driver’s seat. Its roof extends to its rear hatch, giving it a cargo area behind the rear seats instead of a separate trunk. It’s boxy and tall — 7 inches of ground clearance won’t get it over many trail obstacles, but if you parked it next to a Honda Civic, it would fully block the view of the car. In other words, it’s an SUV.

At least, that’s how Cadillac sees it. That’s how Cadillac markets it. But the IRS has decided that it isn’t because it only (for now) comes in rear-wheel drive. The question isn’t semantic. It’ll cost some shoppers $7,500. Which means, in practice, it will cost Cadillac sales.A new law changes EV tax credit rules Last summer, Congress passed a new law governing the $7,500 tax rebate the federal government offers to buyers of electric vehicles. The law is complex and has many goals. Among them, it’s aimed at getting more Americans into EVs to help slow climate change. It eliminated a 200,000-per-manufacturer cap, ensuring Americans can buy endless electric cars from any manufacturer and count on the federal rebate. The law tries to boost domestic manufacturing by limiting tax credits to vehicles built in North America. That provision has already caused some automa …

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