IRS issues updated classifications for new EV tax credits

The Biden Administration has changed its definition of an "SUV" to make more electric vehicles eligible for up to the full $7,500 in federal tax credits at higher prices. This change means certain vehicles that had previously not been considered SUVs because of their weight now have a retail price cap of $80,000, instead of the $55,000 limit for EV cars, sedans and wagons. When the updated guidance is issued in March, the following vehicles at all trim levels will now have an MSRP cap of $80,000:

  • Audi Q5 PHEV
  • Cadillac Lyric
  • Ford Escape Plug In Hybrid
  • Ford Mustang Mach-E
  • Lincoln Corsair Plug In Hybrid
  • Tesla Model Y
  • Volkswagen ID.4

For more about this change, you can read this CNBC article and for a guide to the EV tax credits, you can visit Plug In America tax credits page.