Just as Tesla Inc. cut $2,000 off the price of all of its vehicles to help offset the loss of the $7,500 federal tax credit, General Motors is now in the same position after crossing the threshold just as it headed into 2019.
According to Reuters, the company reached the milestone – which began with sales in 2010 – at some point during the fourth quarter of 2018. Now buyers of GM-produced electric vehicles will only be able to get the full credit until April, at which point it will drop to $3,750. After another six-month period, it will fall again in October to $1,875.
That will last until April 2020, after that – barring some sort of new legislation from Congress – the credit disappears. The company knew it was closing in on the target this fall as it began to lobby members of Congress to extend the credit for EV buyers.
General Motors officials decline to confirm if the company has passed the 200,000 mark, telling the TheDetroitBureau.com, it was reporting full-year sales tomorrow.
(GM presses to extend EV tax credits. Click Here for the story.)
However, it’s announcement that it planned to close five plants and displace as many as 15,000 workers as part of a massive reorganization, put the company in a tough bargaining position.
In fact, after that announcement, President Donald Trump said he would look into ways of revoking the tax credit altogether for General Motors. However, it appears unlikely he’ll be able to do anything about the credit now, but early response to the company’s lobbying efforts from Congressional representatives was tepid.
(Click Here for more about GM CEO Mary Barra’s two-day D.C. tour.)
The tax credit was created by the Obama administration, which at the time wanted to put 1 million electric vehicles on the road before he left office. While falling well short of the goal – falling gas prices pretty much killed consumers’ desires for a small, battery-electric vehicle – the effort wasn’t unsuccessful.
Not only did buyers overcome that, the latest models offered enough range on a single charge to help buyers get over range anxiety with vehicles pushing past 250 miles of travel on a single charge.
(Trump ending EV subsidies by 2021. Click Here for the story.)
In November, a congressional report said 57,066 taxpayers claimed $375 million in EV tax credits in 2016. Congress estimates the cost of the EV tax credit at $7.5 billion between the 2018 and 2022 fiscal years, Reuters reported.