- The Chevrolet Blazer EV and Cadillac Lyriq are discounted until they are again eligible for the federal EV tax credit.
- Other automakers like Volkswagen and Tesla face the same problem.
- A loophole allows for leased cars to qualify for the $7,500 tax credit without current requirements for North American assembly or battery production.
General Motors Offers Incentives to Blazer EV, Lyriq Buyers to Offset Tax Credit Loss
The two electric vehicles are now heavily discounted
On January 1 of this year, the U.S. Treasury Department rolled out new guidelines that reduced the number of electric vehicles that will be eligible for federal tax credits. These guidelines restricted where battery materials are sourced and raised the required percentage of the value of battery material that is extracted or processed in the U.S. or a country with which it has a trade agreement.
It's a bit confusing, but the upshot is that the tax credit is no longer offered with the purchase of a number of EVs, including the Chevrolet Blazer EV and Cadillac Lyriq. In its place, parent company General Motors is now offering a $7,500 discount for the pair. With the exception of the soon-to-be-discontinued Bolt and Bolt EUV, GM has said all of its EVs will “temporarily” lose access to the tax credit, per Reuters. GM says that after it makes changes to parts sourcing, all of its EVs will again be eligible for the tax credit, with the Blazer EV and Lyriq expected to be back on the list early this year.
GM was not the only automaker to lose out, however. The Treasury Department says that the Volkswagen ID.4, Nissan Leaf and certain Tesla Model 3s are all no longer available with the tax credit. According to Reuters, the number of qualifying EVs and plug-in hybrids has dropped from 43 to 19.
The Ford Mustang Mach-E and Ford E-Transit electric vehicles and the Lincoln Aviator Grand Touring plug-in all lost their tax credits in the shakeup. However, the credits are still applicable to the Lincoln Corsair Grand Touring and certain versions of the Ford F-150 Lightning electric truck.
However, the brand simultaneously announced sweeping price changes for the Lightning. Pricing for entry-level trims has risen anywhere from $2,000 to $7,000, and the XLT 311A trim is now $10,000 more expensive. Some prices fell, too, though the two Platinum trims that saw discounts don’t qualify for the tax credit due to the $80,000 price ceiling for the credit.
There is a loophole for leased EVs. It allows those to qualify for the $7,500 tax credit without current requirements for North American assembly or battery production. Ford is currently also offering a $7,500 cash incentive on top of the tax credit for all-new 2023 Mustang Mach-Es leased through Ford Credit.
Am I Ready for an EV?
Though Chevrolet's loss of the federal tax credit is temporary, many competing automakers are offering discounts and incentives as well. Buyers can expect to see vehicles slowly become eligible again as brands work to make changes to fit into the Treasury Department’s new requirements for EV production.