The Internal Revenue Service does seem to listen to comments when it proposes a rule.
The agency, which is responsible for implementing the new electric-vehicle purchase tax credits passed as part of the Inflation Reduction Act, has redone the eligibility price limits for several EVs. The changes benefit
(F) as well as
Model Y, which is the best selling EV in America, now qualifies for the $7,500 credit if it is priced under $80,000. That essentially means the IRS is giving the Model Y the same tax benefit available to SUV or trucks. Earlier, a Model Y had to be priced below $55,000. That’s the price cap for cars.
The Cadillac Lyriq and the Ford Mustang Mach-E were in the same boat as the Model Y. Other similar-sized vehicles such as the Audi eTron were treated like SUVs in terms of eligibility from the start.
Now both the Lyriq and Mach-E qualify for the credit if they are priced under $80,000.
Confusion over eligibility for the EV credit might have contributed to weak Mach-E sales in January.
delivered 2,626 Mach-Es in January, down 45% from the 4,775 SUVs in December. Ford cut prices on the Mach E late in January after Tesla cut Model Y prices on Jan. 12.
The tax-credit change appears to be helping Tesla stock. Shares were up 5% at $197.77 in late morning trading Friday. The
was off 0.1% and the
Dow Jones Industrial Average
was up 0.2%.
Ford stock was down about 7%, but the shares were also reacting to weaker-than- expected fourth-quarter earnings reported Thursday evening. GM stock was up 0.6%, more than 2% above its low for the day.
Write to Al Root at email@example.com