Heavier Electric Vehicles Like Tesla Model Y Now Qualify for Federal Tax Benefit as SUVs

The U.S. Treasury Department has changed the standard for what kind of electric vehicles qualify for a federal tax benefit under the Inflation Reduction Act. 

Before this change, electric vehicles such as the Tesla Model Y, Ford Mustang Mach-E, Cadillac Lyriq, and Volkswagen’s ID.4 were not considered SUVs because of their lower weight. This meant they couldn't access the credit that capped Manufacturer Suggested Retail Price (MSRP) at $80,000, and they were too expensive to get access to the credit with the $55,000 cap. 

Tesla CEO Elon Musk tweeted a month ago that the prior rule was "messed up!"

Now these newly minted SUVs qualify for the $7,500 credit if they cost $80,000 or less, while cars, sedans, and wagons continue to qualify if they are priced less than $55,000. 

"This change will allow crossover vehicles that share similar features to be treated consistently," said the Treasury Department in a press release. "It will also align vehicle classifications under the clean vehicle credit with the classification displayed on the vehicle label and on the consumer-facing website FuelEconomy.gov." 

More In Business

The Best Fashions These Days Are — Surprise! —Sustainable as Well

Fast fashion may be becoming a thing of the past as consumers are increasingly turning toward more sustainable fashion choices — and brands listening.

Summer 2024: AAA Forecasts 44M Travelers, Solo Trips, AI, and Taylor Swift

AAA predicts a surge in summer 2024 travel, with 44 million travelers, surpassing pre-pandemic levels. Expect more solo trips, AI use, and Taylor Swift.

Impossible Wants Meat Eaters to Add Plant-Based Burgers to Their BBQ

As Americans prepare for a long weekend of grilling, Impossible Foods wants to put aside the culture wars, win over meat eaters – and IPO when it's 'ready.'

Nvidia Earnings Shatter Expectations: ‘It’s Not a Chip Stock Anymore’

Nvidia is almost a ‘monopoly’ when it comes to A.I. – but after proving growth in its other businesses, it’s not just a chip stock anymore.

Chill Out, Boomers: Young Consumers Really Have Faced a Tough Economy

Younger consumers are maxing out their credit as they deal with a tough economy, a Bankrate analyst explains.

As Grocery Prices Surge, Thrive Market Emerges as Affordable Solution

In April, grocery prices rose by 1.2 percent, reaching pre-pandemic levels of food inflation. Could an e-commerce grocer be the solution? Thrive Market says yes

Debating Whether to Buy Nike Stock? One Analyst Says Just Do It

Americans spend billions on athleisure every year, and these underperforming brands have room to grow.

When You Buy That New PC, Microsoft Wants it to be Powered by A.I.

Microsoft hopes that the millions of people who haven’t bought new computers since 2020 will help turn the company into a leader in the A.I. space.

A Date Is Set! What Recording Academy CEO Harvey Mason Jr. Teased About The 2025 Grammy Awards

The Recording Academy CEO, Harvey Mason Jr., sat down with Cheddar to discuss what to expect on Sunday, February 2nd 2025 at the 67th Annual Grammy Awards.

Get Comfortable: The U.S. Economy Is Heading for a Soft Landing

Parsing through the latest news might make it feel impossible to tell how the U.S. economy is doing. This analyst's take? We're in the best case scenario.

Load More