Cadillac Lyric.
Now General Motors will not have to discount it (photo: manufacturer's website)
What is a recreational vehicle, or a jeep?
The last few decades have turned out to be a complete marketing mess in terms of car market definitions.
It used to be clear that a Jeep was an SUV.
And also Toyota Land Cruiser or Mitsubishi Pajero.
Then the crossovers entered the market, elevated vehicles, without ladder chassis, without power transmission, and later even without dual drive.
Then they also became less high, only slightly more than private cars.
And yet in the eyes of car buyers, even the latter were considered a fashionable "Jeep", even if in the dry definitions they were not really such, at least those of the American government that divides the return between private vehicles and recreational vehicles and vans to calculate the average fuel consumption of the vehicles in each category, for example .
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Mustang Mach E (left) and Mustang gasoline that will not receive the benefit (photo: Ford)
Last year, the Biden administration managed to approve together with the American budget a plan to encourage the purchase of electrified, plug-in and pure electric cars.
The benefit in the form of a tax credit worth $7,500 can be received by any American who purchases a car that was manufactured in North America and that has a battery with a capacity of at least 7 kWh, - to avoid giving the benefit to normal hybrids that usually have a battery of 2 kWh.
But in order not to encourage the car manufacturers to raise prices now, a threshold has been set for the benefit: eligibility to receive cars at a price of up to $55,000 and recreational vehicles, vans and commercial vehicles at a price of up to $80,000.
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Tesla Model Y. Will the prices now go back up? (Photo: manufacturer website, manufacturer)
The problem was that according to the definitions of the American government, the popular Tesla Model Y was not considered a recreational vehicle, but the 7-seater version, and was more expensive than 55 thousand dollars.
The Ford Mustang Mach E also missed the mark, as did the Cadillac Lyric which costs $62,000.
The protests of the drivers and the car manufacturers sent the administration to recalculate the route, and the decision was transferred to the American Internal Revenue Service (IRS) which is responsible for the benefit.
At the end of the week, the US Treasury published the income tax decision, which succumbed to pressure.
From now on, at least in terms of the streetcar tax benefit, the Model Y, Mustang Mach E and Lyric are all recognized as recreational vehicles.
The same goes for the Volkswagen ID.4, which before was eligible for the benefit only in the dual drive version.
So now everyone is happy, except for Tesla, which claims that last month's dramatic price cut across the world was partly to ensure that the Model Y Long Range would cost less than $55,000 and qualify for the rebate.
Will Tesla now raise prices?
We shall see.
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