General Motors (GM) disclosed on Thursday that its Cadillac Lyriq and Chevrolet Blazer EV models are expected to temporarily lose eligibility for the U.S. electric vehicle (EV) tax credit from January 1. This announcement comes as part of broader changes affecting various automakers and their electric offerings.
GM’s adjustments to tax credit eligibility
Starting January 1, GM anticipates that only its Chevrolet Bolt EV will retain eligibility for the consumer EV tax credit. The Cadillac Lyriq and Chevrolet Blazer EV will no longer qualify due to specific components. GM clarified that modifications to these minor components are underway, with plans to introduce qualifying components in early 2024. Consequently, the automaker expects the Lyriq and Blazer EV to regain tax credit eligibility at that time.
Sourcing changes and future eligibility
GM emphasized that sourcing changes related to the affected components are already accelerated, ensuring the timely reintroduction of its electric models into the eligibility criteria. Additionally, GM stated that forthcoming EVs, including the Chevrolet Equinox EV, Chevrolet Silverado EV, GMC Sierra EV, and Cadillac OPTIQ, produced after the sourcing change, are anticipated to qualify for the full EV tax incentive.
Treasury guidelines impacting EV tax credits
The U.S. Treasury recently issued guidelines implementing battery sourcing restrictions effective January 1. These guidelines are designed to reduce reliance on Chinese components in the U.S. EV supply chain. GM cited Treasury’s strict rules disqualifying EVs with specific foreign battery content, including low-value components, leading to the temporary ineligibility of the Lyriq and Blazer EV for the tax credit.
Ford’s electric vehicle tax credit changes
In addition to GM’s announcement, Ford Motor revealed that its E-Transit will lose the USD 3,750 tax credit on January 1, along with the Mach-E and Lincoln Aviator Grand Touring plug-in hybrid. However, Ford’s F-150 EV Lightning will retain the USD 7,500 credit, and the Lincoln Corsair Grand Touring will maintain a USD 3,750 credit.
Impact on Tesla’s Model 3
Tesla’s Model 3 Rear-Wheel Drive and Long Range variants are also set to lose federal tax credits starting January 1. The move aligns with broader changes in tax credit eligibility for electric vehicles, reflecting adjustments to encourage domestic battery sourcing.
Looking ahead
Automakers are navigating the evolving landscape of EV tax incentives, adjusting their sourcing strategies to comply with the new guidelines. The temporary loss of tax credit eligibility for specific models underscores the industry’s ongoing efforts to align with regulatory changes while maintaining competitiveness in the rapidly expanding electric vehicle market. The impact of these adjustments on consumer choices and the overall adoption of electric vehicles remains to be seen as the industry adapts to evolving regulatory frameworks.