Pricey SUVs Are Flashpoint as US Reworks Tax Incentives for EVs

General Motors Co. has taken a central role in pushing the Treasury Department to change how the government defines a sport utility vehicle and expand how many buyers can get electric-vehicle tax credits under President Biden’s Inflation Reduction Act.

Billions of dollars in EV incentives over the next decade are at stake as the government and companies hash out final rules, expected in March. At the center of the debate is this question: What’s a car and what’s an SUV? That because SUVs costing up to $80,000 can get $7,500 in tax credits, while passenger-car buyers get nothing if the ...