The Trump administration intends to bring EV tax credits to an end, among other subsidies also on the chopping block.
This all stems from a new restructuring campaign announced last week by General Motors which sees products discontinued, plants unallocated, and employees laid off. In response, the White House said it would be exploring ways to counter the action, with economic adviser Larry Kudlow citing subsidies for electric cars and renewable energy sources as prime targets.
“As a matter of our policy, we want to end all of those subsidies,” said Kudlow, quoted by Reuters. “And by the way, other subsidies that were imposed during the Obama administration, we are ending, whether it’s for renewables and so forth.” There wasn’t a specific timeline given, with 2020 being the earliest available opportunity.
The $2,500-to-$7,500 federal tax credit offered to consumers who buy plug-in hybrid, or pure electric vehicles was a boon to the popularity of GM’s first hybrid, the Chevrolet Volt, and spurred adoption of Bolt EV as consumers deal with the sticker shock associated with alternative propulsion. The EV tax credits are capped by Congress at 200,000 vehicles per manufacturer, and GM is expected to cross that line by the end of this year.
US President Donald Trump was hoping to unilaterally impose punishment on GM in retaliation for the company’s decision, but Kudlow was clear any changes to the EV tax credit program would affect all manufacturers.
“I think legally you just can’t.” Even if the EV tax credit ends, GM will have at least maximized its value in terms of sales. Future GM electric vehicles that come to market would have to be purchased by the consumer at full price.
Of course, the Democrats do take control of the House in January, and the probability that the party goes along with the scheme is extremely low as many have been pushing for additional incentives to rapidly spur consumer adoption. GM, along with Nissan and Tesla have been lobbying Congress in hopes of getting the vehicle cap raised.