Earlier this summer, Tesla became the first major automaker to reach the cap for the United States government’s electric-car tax credit. The credits are good until an automaker sells 200,000 qualifying electric cars and plug-in hybrids. General Motors is likely on deck to be the second automaker.
GM has sold 186,670 qualifying vehicles, the Detroit News reported Monday. The tally includes the Chevrolet Volt, Spark EV, Cadillac CT6 Plug-In and the Bolt EV. Each car has been eligible for a $7,500 tax credit. GM itself predicted it will reach the cap by the end of this year, but Edmunds believes it won’t happen until the first quarter of 2019.
Once an automaker reaches the cap, the $7,500 credit enters a sunset period and halves itself every six months until the figure reaches $0. Thus far, there are no plans to extend the credits, though a bill was introduced in Congress earlier this year. The credits were originally designed to increase electric-car sales at the turn of this decade, but it’s only recently that automakers have begun offering plug-in and electric cars with ranges more suitable to drivers’ needs.
It’s unclear what the loss of the tax credit will mean for GM’s zero-emission future pledge. In the near-term, the tax credit will mean Chevrolet’s electric cars will cost more, which could hurt sales. Analysts believe Tesla is in a better position to absorb the tax-credit loss since the cars are priced higher compared to Chevrolets.
GM plans to introduce 20 electric cars by 2023 and the first two were originally expected by 2020. However, reports surfaced that one of the cars for North America, a Bolt EV-based Buick electric car, may be on hiatus as GM deals with the loss of the tax credit.