This is why some vehicles qualify as SUVs and others do not qualify for the IRA EV Tax Credits

Ever since the Biden administration’s Treasury Department signed into law the $430 billion Inflation Reduction Act (IRA) in August that changed the availability of plug-in hybrid and electric vehicle (PHEV) incentives, there has been a lot of confusion regarding to which models are classified as SUVs and which are not. ‘t, as this affects whether they qualify for up to $7,500 in federal tax credits.

Basic criteria explained, including MSRP limits

To begin, all electric vehicles must be assembled in North America (…unless leased), have a battery capacity of at least 7kWh, and a Gross Vehicle Weight Rating (GVWR) of less than 14,000 pounds ( 6,350kg). However, the IRA limits the MSRP based on the classification of the vehicle. And by MSRP, the Tesoro means the base model regardless of how tall the rest of the line is, so if you get a loaded, fully-optioned top-end version that exceeds that value, you still qualify, as long as you the input level The MSRP of the model remains below the limit. SUVs and trucks can have a base MSRP of up to $80,000 to qualify, while cars, sedans and wagons are limited to a base MSRP of $55,000.

How the EPA and the government classify vehicles

Now is the time to go down the rabbit hole of legal definitions and government regulations on vehicle classifications. In a nutshell, it all comes down to how the EPA and therefore the government classify vehicles and whether they are considered regular passenger cars (ie cars, sedans, trucks), a work van, a non-car is passenger which covers various (but not all) pickup trucks, SUVs, and minivans (three rows or more), or a number of other heavy vehicle classifications, such as tractors and trucks, which are not our concern here for EV tax incentives Of anger.

More: The Complete List of Cars Eligible for the $7,500 Federal EV and PHEV Tax Credit

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Please note that the EPA/government classifications and regulations discussed below differ and often conflict with those on the EPA’s website which are governed by separate rules and do not apply to IRA EV tax credits. Confused a lot? Well, it gets worse, much worse.

The US government follows the Electronic Code of Federal Regulations (eCFR) for vehicle classification. As mentioned above, SUVs and minivans fall under the category of non-passenger cars (we know that sounds counterintuitive) as described in regulation 49 CFR Part 523.5 which states that these vehicles are not considered passenger cars or work trucks. Instead, they fall into one of two categories.

What Defines a Pickup, Minivan, Van, and MPV

    This is why some vehicles qualify as SUVs and others do not qualify for the IRA EV Tax Credits

The first (somewhat loose) covers regular trucks, minivans, vans and minivans with the regulations that establish that the vehicle must be designed to perform at least one of the following functions:

(one) Transportation of more than 10 people;

(2) Provide temporary housing;

(3) Transport of goods in an open bed;

(4) Provide, as sold to the first retail purchaser, a larger volume of freight than passenger transportation, such as in a cargo van; If a vehicle is sold with a second row seat, its cargo volume is determined with that seat installed, regardless of whether the manufacturer has described that seat as optional; either

(5) Allow expanded use of the automobile for purposes of transporting cargo or other non-passenger purposes through:

(Yo) For non-passenger cars built before the 2012 model year, removal of the seats by means installed for that purpose by the car manufacturer or with simple tools, such as screwdrivers and wrenches, to create a flat surface at seat level. floor extending from the most forward point of installation of those seats at the rear of the interior of the automobile; either

(ii) For non-passenger cars built in model year 2008 and later, for vehicles equipped with at least 3 rows of seats designated as standard equipment, allow expanded use of the car for cargo transportation purposes or other purposes that non-passenger seats by removing or storing folding or swiveling seats to create a flat, level cargo surface extending from the most forward point of installation of those seats to the rear of the car’s interior.

What is classified as an all-terrain vehicle or SUV

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    This is why some vehicles qualify as SUVs and others do not qualify for the IRA EV Tax Credits

For a car to qualify as a Sport Utility Vehicle (SUV), or more precisely, a car capable of off-road operation, section b of 49 CFR § 523.5 states that it must be either rated at over 6,000 pounds of Gross Vehicle Weight Rating (GVWR) or have four-wheel drive Y Additionally, meet at least four of the following five characteristics/criteria:

An angle of approach of not less than 28 degrees.

• A break angle of not less than 14 degrees

• A departure angle of not less than 20 degrees

• An operating clearance of not less than 20 centimeters (7.87402 inches)

• Clearances between the front and rear axles of not less than 18 centimeters (7.08661 inches) each

If you’re wondering, what manufacturers advertise as curb weight is different than the Gross Vehicle Weight Rating (GVWR) that is taken into account in these rules. In simple terms, GVWR is the maximum amount the vehicle can weigh on the road, and that number includes the curb weight of the vehicle plus all occupants and their cargo (but not a trailer).

With that out of the way, let’s get into the details and see why some models qualify and others don’t.

Why the VW ID.4 RWD is considered a car and the ID.4 AWD an SUV

    This is why some vehicles qualify as SUVs and others do not qualify for the IRA EV Tax Credits

According to the regulations, the ID.4 RWD does not count as an SUV but the ID.4 AWD does. However, if we were to go by VW’s US public spec sheet, neither should qualify as an SUV!

According to the official press spec sheet, the 2023 ID.4 RWD model is listed with a ground clearance of 6.0 inches (153 mm), an approach angle of 17.3, and a departure angle of 21.0 degrees. . The respective numbers for the ID.4 AWD are listed on the press spec sheet as 6.8 in (173 mm) ground clearance, 18.7 degree approach angle, 20 degree departure angle .2 degrees and a break angle of 18.3, which would mean it also fails at least 2 of the 5 criteria and therefore should not be classified as an SUV for the $80k MSRP limit.

However, after speaking to VW – and I should point out here that they were the only manufacturer and press spokesperson to respond to our queries quickly, accurately and knowledgeably – we learned that the figures on the spec sheet of the press are incorrect. VW told us that the ID.4 RWD doesn’t qualify as an SUV because it fails in at least two of five criteria, including a lower ground clearance of around 7.8 inches (19.81 cm), while the AWD model passes. sits 8.2 inches (20.83 cm) above the ground and meets at least three of the aforementioned criteria (we’re still waiting on those numbers).

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Why the 7 seater Tesla Model Y qualifies for the $80k cap but the 5 seater is capped at $55k

    This is why some vehicles qualify as SUVs and others do not qualify for the IRA EV Tax Credits

Many people, including Elon Musk himself, were quick to blame the minimum 6,000-pound GVWR, but that’s not the case, as neither the 5-seater nor the 7-seater Model Y actually qualify as an SUV. While AWD makes them both eligible, they fail to meet all 4 of the 5 criteria needed to be classified as an SUV and apparently fail at least three requirements:

A) Ground clearance, since Tesla itself claims that the Model Y Long Range has 6.8 inches (17,272 cm) and the Performance, 6.2 inches (15,748 cm).

B) and C) Approach and Departure Angles; While Tesla doesn’t communicate these numbers in the online manual (and they notoriously and chronically refuse to respond to any of our messages), MotorTrend claims that the Long Range has an approach angle of 18.0 degrees and a departure angle of 17.0 degrees, both of which are well below the minimum requirement.

If they’re not SUVs, how does the 7-seater get the $80k MSRP limit? The answer is right in front of us; it’s because Treasury classifies it as a non-passenger car under section 523.5(a) of Title 49 in the code of federal regulations due to the fact that it has three rows of seats, just like the Chrysler Pacifica PHEV which is eligible for the $80k MSRP.

A person familiar with government regulations explained:

“Model Y is not classified as an SUV under existing EPA regulations for CAFÉ standards (40 CFR 600.002). It is described as an SUV on FuelEconomy.Gov and for fuel economy labeling purposes (governed by EPA regulations at 40 CFR 600.315) due to the existence of the three-row model in addition to the two-row model. However, manufacturers are aware of and use existing CAFÉ standards, regardless of fuel economy labeling standards.”

Why the Ford Mustang Mach-E and Cadillac Lyriq don’t count as SUVs

    This is why some vehicles qualify as SUVs and others do not qualify for the IRA EV Tax Credits

While Ford never responded to our email, we were able to find out why the Mustang Mach E isn’t classified as an SUV. Although available with AWD, the Ford Mustang Mach-E does not meet four of the five criteria, having a ground clearance of between 5.3 and 5.7 inches (13.46 and 14.48 cm) and a approach angle of only 15.5 degrees (although its departure angle of 25.7 degrees is well above the minimum).

While GM doesn’t publicly release all of these numbers for the Cadillac Lyriq, a company spokesperson told us they are looking into it and will forward the information to us. If we had to guess, the Lyriq simply doesn’t meet 4 of the 5 required criteria, like ground clearance which is definitely under the 20cm (7.87402in) limit at 177.78cm (7.0in) , but we’ll update you with the rest once Cadillac contacts us.

And with that, we’ve wrapped up the explanation of why some vehicles that you, the consumer, as well as manufacturers and even the EPA’s fuel economy website describe and consider to be SUVs, are not classified as such by the Department of Treasury for EV Incentive Purposes.

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