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.”
Steve Carlisle
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.
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Comments
If they could put this into law before I take delivery of my Model 3 Long Range AWD, that would be great.
Wait a minute, you went from a Sonic to a 3 and didn’t even stop by the Bolt dealer?
It would be worth waiting to see how this shakes out. Especially with the opportunity for the credit to be applied on the front end.
Nope, let the market decide if EVs should replace ICE. Keep your hands out of the taxpayer’s pocket.
Can we tell that to all the subsidies the gas and oil giants haven received? Also, if you’re gonna make that argument, GM shouldn’t be alive today if it wasn’t for Government bailouts. The people would have had their way and GM would have seen it’s own demise.
Oh wait, are you one of those people who thinks Obamas 2 failed wars in the middle east are a subsidy to the oil and gas industry?
Stop peddling lies. Those wars were started by George W. Bush.
You folks with EVs are already getting subsidies. You are not paying federal or state gasoline taxes and are getting a free ride which is sickening since your “porker” EVs generally weigh more than the average vehicle and are causing faster deterioration of the roads!
EVs should have a weight tax AND an avoided gas tax. Oil and gas get ZERO subsidies.
Go check AASHTO pavement design. Cars and trucks have almost no impact on the structural life of the pavement. They do add to the need for more lanes for which they should pay some tax. States around the country are looking into how to tax vehicles that don’t use gas. It’s coming.
I can see it from two ways 1) gms perspective which is we helped start the industry and now when we get to scale, there will be millions of lower priced competitors initially and 2) gm you got a chance to work out kinks on a new tech because of the 7500 credit for essentially beta purchases so you have a leg up on the competition and don’t need the 7500 anymore. All in all I don’t fault gm for doing this but I’m reality, the program should be canceled now that the technology has matured or at least halved with caps on purchase price (does a 250k electric car deserve 7500?
I’m sure the Biden administration will change the rules for gm but I’m not in favor of more corporate charity. I can half-way accept that there was a tax credit to help offset the initial high price for new EV technologies but they shouldn’t continue to subsidize carmakers. If gm already got and used up their subsidies, that only means their EV development costs have already been offset and they therefore should be ahead of the competition and more ready to stand on their own two feet so to speak. As it is now, all carmakers get a $7,500. government subsidy for 200,000 vehicles. If the government gives gm another 200,000 allotment then they’d have to give it to everyone else too so I hope Biden doesn’t cave to Barra but I’m pretty sure he will.
The reality will then be that middle income Americans who can’t afford a $100,000 Hummer EV will effectively be subsidizing the purchase for those who can. Not right. Not fair. I hope that Congress and Joe tell Mary no. If she bet the company’s future on high-priced EVs, she needs to live with the consequences. She knew the subsidies wouldn’t last forever.
Biden is definitely going to cave, it’s what he does best. I really wouldn’t call it caving thought because it’s more like cunnilingus. He’s in bed with Mary Antoinette Barra just like the rest of Washington.
However, people are just gonna buy the cars they want… And it’s probably still gonna be ICE for like 90% of the population, unfortunately for Mary that means she is going to actually have to start working for profits soon. The free ride subsidies need to end at some point. She can’t just keep claiming record profits while selling off and firing everything and everybody.
H4cksaw,
I definitely agree that it’s easy to claim record profits when jobs are being shifted to Mexico and China, entire markets are being exited, AND when “unprofitable” products are eliminated. The problem with that last item is they often lure in new, young buyers to the gm fold. It’s well known that products like the Sonic make little money but if gm sells a Sonic or Cruze today, they might create a customer for life who’ll come back for more profitable products later. Given that gm really only has a portfolio of expensive trucks and SUVs, Corvettes, and, soon, $100,000 Hummer EVs, there isn’t much there for first time buyers so they’ll shop at a Toyota or Hyundai dealer and then perhaps stay with that brand for life. Mary is very possibly generating short term profits at the expense of the long-term health of the company. That’s why I said the other day, her success as CEO cannot possibly be determined today. It’ll be decades before it’s known. Roger B. Smith wasn’t thought of as the disaster he is today during his years at the helm. Only later do all his moves look so misguided.
Wah, wah, make a competitive product and you won’t have to worry about others. As an example, get rid of that cheap, crappy interior in the trucks.
Lots of capital GMs in this article, but it’s actually lowercase gm now. Capitalized GM has been cancelled by Mary Barra. I do wonder how much they paid and are paying for that absolutely failed marketing campaign.
Isn’t it amazing how many anti GM folks hang out on this site. You would think there would be better things to do but hey, if you don’t have a life, I guess you just hang out to make negative comments
If Barra really wants to “Let the marketplace decide” then the EV credit should be dropped across the board and EV’s should be charged mileage tax equivalent to what ICE cars pay. Let the customers choose on a truly level playing field.
I agree with GM, this is a stupid law, wanted by oil companies.