Enlarge / Early VW ID.4s will need to visit a dealership for a software update. (credit: Jonathan Gitlin)

Volkswagen is the latest OEM to issue a recall for some of its electric vehicles. This time the problem afflicts the MY2021 ID.4, VW's EV crossover. The problem concerns the battery management control module, as well as the pulse inverter control module. This version of the battery management control unit software can be too sensitive and reset itself in some circumstances, and the pulse inverter control module can, under rare conditions, deactivate if there's a software failure.

VW first had an inkling there was a problem in July 2021 when reports started coming in of potential problems with the high-voltage battery management software. By September 2021, VW had concluded there was no unreasonable risk to drivers but continued studying the problem. By January 2022, VW's supplier told it that the pulse inverter software had problems, too.

Last summer VW went through feedback questionnaires from ID.4 owners and found that "some reports from the US market indicated that the battery management software issue could have led to stalling allegations."

Enlarge (credit: Getty Images)

On Friday the US Treasury Department published an update to the way it implements the new clean vehicle tax credit. Introduced in the Inflation Reduction Act of 2022, the new rules restrict the number of EVs that qualify for a federal tax credit of up to $7,500 with income and price caps, as well as a requirement for final assembly in North America and, once the Treasury has written some more guidance, a requirement for domestic content and value in the EV battery.

When the new rules came out in January, there were some complaints that some five-seat crossovers—the Cadillac Lyriq, Tesla Model Y, and Volkswagen ID.4—were being counted as sedans, with a $55,000 MSRP cap; anyone buying any of those EVs with a purchase price of more than $55,000 was ineligible for the tax credit, although the seven-seat Model Y was classified as an SUV and therefore only subject to an $80,000 MSRP limit.

The reason for that was the Treasury using the US Environmental Protection Agency's Corporate Average Fuel Economy standard classification, which categorizes light trucks (including SUVs and minivans) differently from passenger cars. But there's a separate EPA fuel economy labeling standard, used in consumer-facing applications, that already counted the Lyriq, Model Y, and ID.4 as crossovers and not sedans.