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GM will be the second automaker to lose the EV tax credit, while Bolt sales stumble

GM will be the second automaker to lose the EV tax credit, while Bolt sales stumble


Buyers will have until April 1st to take advantage of the full $7,500 credit

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Photo by Andrew Liptak / The Verge

General Motors confirmed on Thursday that it sold its 200,000th plug-in vehicle in the US during the fourth quarter of 2018, which has triggered a slow phaseout of the $7,500 federal tax credit over the next 15 months. GM is the second automaker to pass this mark; Tesla reached 200,000 vehicles sold in the US last summer.

Customers of GM cars that are eligible for the credit (like the Chevy Bolt or the Cadillac CT6 plug-in hybrid) will only be able to receive a maximum of $3,750 starting on April 1st. The maximum available credit will halve again on October 1st to $1,875, and it will completely phase out six months later in April 2020.

The EV tax credit was created by the Obama administration in 2009 to encourage automakers to embrace electrification. It was also meant to help consumers by offsetting the cost of battery technology until it came down in price. To that end, the credit was never meant to be permanent, and so a cap of 200,000 vehicles sold was included. Once a company passes that mark, the tax credit decays over a period of 18 months (dating back to the beginning of the quarter when the 200,000th vehicle was sold). Tesla crossed that threshold in early July 2018, and on January 2nd of this year, the company cut $2,000 off the starting price of all its models to compensate for the credit dropping to $3,750.

Bolt sales fell more than 20 percent in 2018 compared to 2017

GM also announced its final sales figures for 2018, and the numbers show that the Michigan-based automaker’s zero-emission cars trended in the wrong direction last year. GM sold 18,019 all-electric Chevy Bolts, which was down more than 20 percent compared to 2017. GM also sold 18,306 Chevy Volts, the company’s original plug-in hybrid that debuted in 2010. Volt sales were down 10 percent compared to 2017.

GM’s overall sales were down nearly 2 percent in 2018, while the larger car market in the US mostly remained stagnant. The makeup of that market has changed dramatically, though: SUV and truck sales are through the roof, while sedans are selling so poorly that many — including a number of well-known models like the Ford Focus — are being discontinued in the US.

Near the end of 2018, GM announced that it was discontinuing production of the Volt and the Cadillac CT6 and that it was pursuing a broader company-wide restructuring effort as well. In November, the automaker shared plans to shrink its workforce by laying off about 14,000 workers and shuttering operations at four US manufacturing plants, which drew condemnation from the Trump administration.

GM CEO Mary Barra has advocated for an expansion of the EV tax credit, saying in March that it “helps make electric vehicles more desirable and affordable.” President Trump has threatened to pull the tax credit in retaliation for GM’s recent downsizing, a move that would likely apply to all automakers but also would have to be approved by Congress.