General Motors is asking the Biden Administration to change the federal EV tax credit rules so its vehicles can once again qualify to receive government subsidies.
Under the current EV tax credit rules, customers are entitled to receive a $7,500 federal tax rebate with the purchase of a battery-electric vehicle. However, an automaker’s vehicle no longer qualifies for the $7,500 subsidy once it has sold more than 200,000 EVs – a threshold that GM surpassed way back in 2018. GM now wants the rules amended so that buyers of its battery-powered vehicles can once again qualify for the tax credit, saying the current laws are penalizing it for being one of the first automakers to mass-produce EVs.
“That tax credit of $7,500 is significant in a purchase decision,” GM CEO Barra said during a television appearance on CNBC last week, as quoted by Automotive News. “We’d like to see (the 200,000 vehicle limit) lifted and let the marketplace decide and not penalize first movers.”
GM North America president Steve Carlisle echoed Barra’s sentiments in an address during a virtual Automotive News Congress event held last week, who said that doing away with the 200,000 vehicle limit would make for a fair fight in the hugely competitive EV sales race.
“Given all the potential barriers to adoption and the fact that we need to get moving along that curve, I think incentives in many different forms enter into the conversation,” Carlisle said. “A level playing field is a reasonable thing to aspire to.”
President Joe Biden has proposed spending $174 billion to increase domestic EV sales and production. This plan includes $100 billion in customer rebates, which buyers of GM EVs would not be eligible for under the current rules. As part of the proposal, Biden has also asked Congress to “give consumers point-of-sale rebates and tax incentives to buy American-made EVs, while ensuring that these vehicles are affordable for all families and manufactured by workers with good jobs.”
GM will be one of the biggest players in Biden’s self-set plan for America to “win” the EV sales race. The automaker is currently building a new dedicated EV plant in Michigan called Factory Zero, which will build the GMC Hummer EV and Cruise Origin AV, among other vehicles. It is also renovating the Spring Hill Assembly plant in Tennessee to prepare it for future EV production. The Spring Hill plant will build the Cadillac Lyriq electric crossover and is rumored to build a new electric Acura crossover on behalf of parent company Honda. GM is also currently building two new battery plants in the U.S. under its Ultium Cells LLC joint venture with LG Chem.
In addition, the UAW has expressed a desire for Biden’s EV tax credit to only apply to American-made EVs. This came in the wake of GM’s decision to invest $1 billion in its Ramos Arizpe plant in Mexico, paving the way for it to build two new electric vehicles there.
“At a time when General Motors is asking for a significant investment by the U.S. government in subsidizing electric vehicles, this is a slap in the face for not only UAW members and their families but also for U.S. taxpayers and the American workforce,” UAW vice president Terry Dittes said in a statement.