General Motors CEO and chairman Mary Barra publically called for the United States Congress to retain the federal tax credits awarded to buyers of electric cars. The tax credit can be as much as $7,500, depending on the electric vehicle.
Reuters reported on Monday that Barra told a group of reporters that ending the tax credits “will have an impact” on electric car sales, including her company’s Chevrolet Bolt EV. “I‘m a proponent of that staying in” the tax code, Barra said. “That’s what we convey to the administration.” Both the U.S. House and Senate passed their own versions of the tax cut bill. The two bodies will conference to create one final piece of legislation for both to vote on. The House bill cuts the electric-car credits while the Senate bill retains them.
Eliminating the federal tax credit would give automakers one fewer tool to persuade buyers into purchasing an electric car. Experts estimate battery-electric cars may reach cost parity with a traditional vehicle sometime next decade as battery costs continue to drop. The 2018 Bolt EV costs $37,495 before any tax credits, which bring many buyers to the touted $29,995 price.
Ending the tax credits “changes the equation,” Barra added.
GM along with many other automakers and environmental groups continue to lobby Congress to keep the tax credits in the final tax bill. Specifically, GM announced plans to introduce 20 new electric cars by 2023. The lack of a tax credit could create unforeseen difficulties for the business plan.