More electric vehicles made by Tesla Inc., General Motors Co. and other auto makers will be eligible for tax credits under a revamp announced by the Biden administration on Friday.
The Treasury Department said that it is adjusting its definition of an SUV, thus qualifying vehicles like the Tesla TSLA, +1.38% Model Y for a $7,500 tax credit if it sells for under $80,000.
The Treasury said it will begin using the “consumer-facing EPA Fuel Economy Labeling standard” to define a car or an SUV, versus the Environmental Protection Agency’s corporate average fuel economy, or CAFE, standard.
General Motors GM, -0.46%, as Reuters reported last month, had urged the Treasury to reconsider how it classified the electric Cadillac Lyriq to allow it to qualify for the tax credits. And Tesla Chief Executive Elon Musk raised the classification issue with White House officials last week, Reuters also reported.
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The Treasury’s adjustment is retroactive to Jan. 1, meaning customers who bought certain vehicles since then can claim the credit.
The credits are part of the Inflation Reduction Act, signed into law last year by President Joe Biden. To qualify for credits, SUVs must be priced at up to $80,000, while cars must cost $55,000 or less.
This article was originally published by Marketwatch.com. Read the original article here.
