GM Will Reach Electric Car Tax Credit Threshold This Year0
General Motors has known the day will come, but we know for sure the automaker will reach the electric car tax credit threshold by the end of 2018.
GM confirmed with Green Car Reports in a Wednesday report that it will sell its 200,000th qualifying vehicle, which will trigger the credit’s phase-out period. Come April 2019, the Chevrolet Bolt EV and Chevrolet Volt will not be granted the full $7,500 tax credit. Instead, the tax credit features a built-in sunset period.
The credit will halve itself the first six months, and then decrease by 25 percent in the following six months, until it reaches $0. In April, buyers will only receive $3,750. Next October, the figure drops to $1,875 until the credit disappears in April 2020.
The electric car tax credit was passed under former President George W. Bush in 2008 as part of the Energy Improvement and Extension Act. At the time, as fuel prices soared, many officials imagined more plug-in hybrids and electric cars would come to market to take advantage of the tax credit. Instead, the timeframe appears to have been off by about 10 years.
Today, many automakers are gearing up to introduce their first electric cars, while early adopters like GM, will lose out on the financial incentive.
GM has been outspoken in the need to extend and reform the tax credit. Last year, the tax credit was nearly cut from the U.S. tax code amid the new tax legislation, but the final bill left the credit in. Today, three legislators have proposed changes.
One Republican senator has called for the tax credit’s end and proposed taxing alternative-fuel vehicles more. The idea is to have electric-car drivers pay their share as the cars don’t pay into the gas tax. A second Republican senator has called for raising the 200,000-vehicle ceiling to offer unlimited credits through 2022. However, there would be no phase-out period, and after 2022, every automaker would lose the credits.
Finally, a Democratic representative has called for an extension of the credit but envisions the $7,500 as a point-of-sale rebate. The bill calls for unlimited incentives for another 10 years.
As the first legacy automaker to reach the threshold, we can imagine GM will start to speak its feelings much more prominently and call on the federal government to act.
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