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GM, Tesla Lose Fight To Extend EV Tax Credit

General Motors is one of the most outspoken companies in all of Washington with regard to EV tax credits, but it seems the automaker’s efforts aren’t paying off.

U.S. Congress declined to extend the current EX tax credit limit of $7,500 this week. GM, along with Tesla, had been pushing to have the limit increased, but the proposal was met with significant opposition in the White House, Reuters reports.

Under the current system, EV tax credits are phased out once an automaker sells 200,000 electric vehicles. After that point, customers will no longer be eligible for the full $7,500 deduction, with the credit amount tapering off until it reaches zero. Both GM and Tesla have already surpassed the 200,000 unit limit, with Tesla’s credits set to expire completely after December 31, 2019 and GM’s petering out after March 31, 2020.

An official credit extension proposal had been put forth by Michigan Democratic Senator Debbie Stabenow. Under the bill, manufacturers would receive $7,000 tax credit for an additional 400,000 vehicles, while the current EV tax credit of $7,500 would remain in place for the first 200,000 vehicles. Stabenow said her proposal saw “extreme resistance,” in the White House.

In a statement released earlier this month, GM said a federal EV tax credit “provides customers with a proven incentive,” to trade in for an EV and helps to make the pricier vehicles “more affordable for all customers,”

“Modifying the tax credit will allow all customers to continue to receive the full benefit and provide them with a greater choice of vehicles,” the company also said.

GM was also keen to extend the EV tax credit as the current situation may put it at a disadvantage going forward. Rival automakers like Ford or FCA have not burned through the available 200,000 tax credits, so customers who buy EVs from those brands will still qualify to receive $7,500 back. With EV prices already higher than comparable combustion engine vehicles, it will be hard for many customers to ignore the potential savings of buying an eligible vehicle versus one from GM or Tesla.

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Source: Reuters

Sam loves to write and has a passion for auto racing, karting and performance driving of all types.

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Comments

  1. So the manufacturers that sat on their hands and let the others spend to develop the technology until the costs come down now get to bring cars to market with a (brief) price advantage.

    From what I have read most of the tax credit dollars have gone to customers that could easily afford to buy these cars (six figures). So truly the money should have gone to the early manufacturers to offset some of their costs with a deadline to kick the rest of them in the pants.

    Way to go Washington! ?

    Reply
  2. gm and tesla should team up on their global EV tax credit treasure hunt.

    tesla supposedly has found the secret sauce to make a profitable EV. let’s see if they can do it w/o tax credits. i’m 100% sure gm can’t.

    Reply
    1. GM did make EV with profits! The cheapest new Model 3 is still more expensive than the Chevy Bolt EV. And Tesla announced a new $500 price INCREASE on top of that! So your post is proof that higher prices increases profits!

      Reply
      1. gm made a profitable EV? which one was that? it has been well documented that gm loses thousands on each bolt sold.

        Reply
    2. Tesla would be part of the history books without the profit from carbon credits that I do not believe they deserve to have in the first place.

      The whole idea was to give industries incentive to invest in clean tech to reduce their pollution output and allowing them to recover some of the costs. Selling that margin to companies that couldn’t afford or needed more time to reduce their own output without suffering regulatory fines.

      Tesla never reduced anything relating to pollution output as they started out an EV manufacture. The carbon credits are therefore nothing but subsidies by the government to keep them alive in a campaign to push the rest of the automotive industry.

      Reply
      1. i’m skeptical of tesla’s EV profits too. but i’m going to play make believe and assume it is true.

        Reply
  3. The POTUS needs his oil based campaign and support money to stop his impeachment, so it is obvious that his fellow thieves in Congress will not give rebates to the people who voted for them. Wait until the new Democratic POTUS arrives, and a new Congress takes power to present new bills for a point of sale rebate for all buyers instead of a tax rebate for the wealthy.

    Reply
    1. Hahahaha. Oh wait, you were serious. Let me laugh even harder. HAHAHAHAHAHAHAHAHAHA

      The last dem President was the one who instituted the tax credit in the first place. The last POTUS used his big banks and big tech money to try and influence the coming election. Lest we not forget Obama took nearly 4 million in campaign contributions from BP. While their oil was flowing into the Gulf. You might wanna do some googling before you act like you’re better than everyone.

      Reply
  4. Just pass a new credit that applies to any car maker that has exhausted the first. Make it somewhere around 2500 or 3000 dollars but REFUNDABLE instead of deductible. Current credit only applies if you have a large enough tax liability, ie your a high earner and don’t need the credit anyway.

    If your average Joe $50k a year 2 kids household could save 3k on a reasonably priced EV and get that money whether they owe tax or not it would be all the incentive needed to lure them in. Assuming an EV would work where they live/drive.

    Reply
  5. This just goes to show us all just how Political all this is in this Country. It doesn’t matter if it is Trump or Obama four years ago. Big Oil is what makes Politics go around. Trump keeps blasting the Big Three (especially GM) for not opening new Facilities and creating NEW “American” jobs yet he will veto a plan that will help save and or create jobs. This is the reality of both Political Parties and why I have been stating here that I fear our Big Three will be left behind in the EV Game as Foreign Makers will unfortunately have an easier path thanks to their Governments willing to spend Billions to make sure they don’t lose in the Segment. They are not beholden to Big Oil as our Government unfortunately is.

    Reply
    1. thank god we have elon musk and his profit making juggernaut to show the way for EVs!!!! tesla is making so much money, i’m surprised they are begging for more subsidies.

      Reply
  6. You are correct. Thank God as you put it that one American Car Company alone is keeping us competitive in the Future of the Automotive World.
    Tesla Sold More Model 3s This Year Than BMW’s 2, 3, 4, 5, 7 And 8-Series Combined!!!

    Reply

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