Last year, most Cadillac Lyriq electric vehicles (EVs) were eligible for a $7,500 federal tax credit. But they lost the discount on Jan. 1. Now, GM claims, it’s coming back.
The federal Department of Energy doesn’t yet include the Lyriq on its list of qualifying vehicles. But industry publication Automotive News reports that a GM executive has claimed the midsize SUV once again qualifies.
GM Chief Financial Officer Paul Jacobson told attendees at the Citi 2024 Global Industrial Tech and Mobility Conference this morning, “I’m pleased to report that today, all of the Cadillac Lyriqs that we’re producing are now compliant.”
About the Lyriq
The Lyriq is an all-electric midsize SUV known for its distinctive chiseled look and what our expert test driver called “an almost suspiciously strong mix of range, charging, power, and pricing figures.” It competes in a crowded field of midsize electric SUVs but has a bit more of a track record than most.
Rules Toughened for 2024
Forty-three cars qualified for up to $7,500 in federal tax incentives last year. On Jan. 1, 2024, that list shrank to just 19.
Nothing about the cars changed. Instead, the rules that govern qualifying tightened.
The portion of 2022’s Inflation Reduction Act that controls the tax credits was written to help develop new supply chains for critical battery minerals that, today, often come from China. It includes two sets of requirements that strengthen each year.
Last year, automakers had to build at least 50% of the car’s battery in North America for it to qualify for a $3,750 tax rebate.
This year, that same requirement changed to 60%.
EV batteries use certain critical minerals. Some are rare. Others are common in geology but not traditionally mined in the quantities America will need to power millions of EVs.
To qualify for a second $3,750 rebate in 2023, automakers had to build an EVs battery with at least 40% of its minerals mined in the U.S., or a country with which the U.S. has a free trade agreement.
This year, that requirement jumped to 50%.
It will happen again and again. The same rules will tighten every Jan. 1 until 2028.
Cars Can Gain and Lose the Discounts
But a car that misses the list in January can reappear on it later.
The rule changes caused some automakers to shift their supply chains. If a company works out new supply contracts, obtaining critical minerals from permitted sources, a car left off the list today could appear on it tomorrow. We expect the list to change frequently during the year.
That appears to be what happened with the Lyriq. Reuters reports that GM made “a battery sourcing change to address two minor components,” allowing the car to once again qualify for discounts.
Jacobson called the change “an example of how we can be nimble within our supply chain.” Reuters reports that the company “expects its Chevrolet Equinox EV, Chevrolet Silverado EV, GMC Sierra EV, and Cadillac Optiq” to regain the incentive as well.
