Mustang Mach-E, Cadillac Lyric Among Ford And GM Vehicles Set To Lose EV Tax Credit Starting Next Year

Legacy automakers Ford Motor Co F and General Motors Co GM will reportedly lose EV tax credits on some of their vehicles from next year.

What Happened: Starting Jan. 1, both GM’s Cadillac Lyriq and Chevrolet Blazer EV will ‘temporarily’ lose eligibility to receive the federal EV tax credit of $7,500, Reuters reported. The Chevrolet Bolt EV, however, will continue to be eligible.

Lyriq and Blazer EV are losing out on tax credits owing to two small components. The company will source eligible components in early 2024 to ensure the two regain eligibility early next year, it said.

As per the report, Chevrolet Equinox EV, Chevrolet Silverado EV, GMC Sierra EV, and Cadillac OPTIQ ‘produced after the sourcing change’ are also expected to be eligible for full tax credit.

Ford, meanwhile, said it will lose tax credit on the E-Transit, Mustang Mach-E, and Lincoln Aviator Grand Touring plug-in hybrid. The F-150 Light will retain its $7,500 credit and Lincoln Corsair Grand Touring $3,750, the report said.

Why It Matters: The change in eligibility is as per the fresh guidance issued by the U.S. treasury earlier this month on requirements to qualify for the federal tax credit.

As per the updated guidance, an electric vehicle may not contain any battery components manufactured or assembled by a ‘foreign entity of concern’ (FEOC) starting in 2024 if they are to receive the federal tax credit. FEOC is an entity that is owned by, controlled by, or subject to the jurisdiction and direction of China, Russia, North Korea, or Iran.

Tesla Inc‘s TSLA Model 3 rear-wheel drive and long-range variants will also not be eligible for any tax credits starting next year.

Photo by MDart10 on Shutterstock

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