GM & Tesla Electric Vehicle Tax Credits being phased out in 2019
Both GM and Tesla have sold a total of more than 200,000 Electric Vehicles – triggering the tax-credit phaseout.
General Motors reached 200,000 cumulative U.S. electric vehicles sold late last year, triggering a phase-out of a $7,500 federal tax credit over the next 15 months, a person briefed on the matter said on Wednesday.
The largest U.S. automaker hit the figure in the fourth quarter of 2018, which means the credit will fall to $3,750 in April, and then drop to $1,875 in October for six months.
The Chevrolet Bolt EV is introduced as the Car of the Year during the North American International Auto Show in Detroit, January 9, 2017.
The tax credit is aimed at defraying the cost of electric vehicles that are more expensive than similarly sized internal combustion engine vehicles. In 2009, Congress set the phase-out threshold at 200,000 vehicles per manufacturer.
GM, which said previously it expected to reach the 200,000 sales figure before the end of 2018, declined to comment ahead of the release of its quarterly sales results on Thursday.
GM and Tesla, which hit the 200,000 figure in July 2018, have both lobbied Congress to lift the cap or extend the existing tax credit. Tesla’s EV tax credit fell to $3,750 on Tuesday and Tesla said it was cutting prices on its EVs by $2,000 to partially offset the lower tax credit.
In March, GM Chief Executive Mary Barra called on Congress to expand the consumer tax credit for electric vehicles as the company boosted production of the EV Bolt in response to consumer demand. She repeated the request last month during a visit to Capitol Hill.
GM said in November it was doubling resources allocated to developing electric and self-driving vehicles as part of a significant restructuring that includes ending production at five North American plants. GM also announced it would halt production of the plug-in hybrid Chevrolet Volt by March.
In November, a congressional report said 57,066 taxpayers claimed $375 million in EV tax credits in 2016. Congress estimates the cost of the EV tax credit at $7.5 billion between the 2018 and 2022 fiscal years. now the $7,500 federal tax credit will be phased out on of their future sales.