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Because of changes with the federal electric vehicle tax credit, a few of General Motors’ EVs will lose their eligibility for the tax credit next year. Starting on January 1, 2024, the Cadillac LYRIQ and Chevrolet Blazer EV will not be available for any portion of the federal tax credit.
Next year, guidance regarding what EVs are eligible for the federal tax credit is changing. The updated rules will disqualify EVs that have battery components from a “foreign entity of concern.” For shoppers, this rule makes any electric vehicles with battery materials from China ineligible for the tax credit.
“After reviewing Treasury’s long-waited proposed guidance, we believe the Cadillac LYRIQ and Chevrolet Blazer EV will temporarily lose eligibility for the clean vehicle credit on Jan. 1, 2024, because of two minor components,” GM spokesperson Liz Winter said in a statement to The Detroit News.
The Detroit News claims that the components that make the LYRIQ and Blazer EV ineligible for the federal tax credit include the separators and electrolytes. GM is looking into sourcing new separators and electrolytes that would make the LYRIQ and Blazer EV eligible for the federal tax credit in early 2024.
“While we await final rules, GM has pulled ahead sourcing plans for qualifying components in early 2024 and will advocate for our dealers and customers who purchase vehicles built ahead of the new guidance,” Winter told the outlet.
In addition to finding new components for the LYRIQ and Blazer EV, GM is also looking to update its source for the Chevrolet Equinox EV, Chevrolet Silverado EV, GMC Sierra EV, and Cadillac OPTIQ to make the electric cars eligible for the federal EV tax credit.
Shoppers looking to purchase an EV from GM that’s eligible for the federal tax credit will want to look toward the Chevrolet Bolt EV and Bolt EUV.
For what it’s worth, GM will be giving shoppers who purchase an EV that’s ineligible for the federal tax credit because of the new guidelines an equivalent discount at the time of purchase. The Detroit News reports that John Roth, vice president of Cadillac, and Scott Bell, vice president of Chevrolet, sent a letter to dealers outlining how GM plans to deal with the new guidelines.
“We are committed to the future of EVs and will have the sales and marketing support to sell these ineligible vehicles. Beginning in January, GM will provide the equivalent EV tax credit purchase amount for any vehicles that became ineligible due to the new guidelines,” reads the letter.
GM isn’t the only automaker that will have EVs that are ineligible for the federal tax credit because of changes to the guidelines. The Ford Mustang Mach-E and Ford E-Transit will no longer qualify for $3,750 of the credit. The Lincoln Aviator Grand Touring PHEV will lose its $7,500 incentive. The Tesla Model 3 RWD and Long Range trims will become ineligible for the $7,500 credit.
Overall, the changes to the guidelines for the federal EV tax credit result in fewer vehicles being eligible for the credit. It also makes things confusing for shoppers, as automakers are just learning what vehicles are ineligible for the tax credit.
Source: The Detroit News
Pictured: 2024 GMC Sierra EV (top), 2024 Chevrolet Equinox EV (middle)
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