WASHINGTON (Reuters) – General Motors Co (GM.N) hit 200,000 total electric vehicles sold in the United States by the end of 2018, reaching a threshold that triggers a phase-out of a $7,500 federal tax credit over the next 15 months, a person briefed on the matter said Wednesday.
The largest U.S. automaker reached 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 credit will completely disappear by April 2020. The 200,000 figure covers GM’s cumulative EV sales since 2010.
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 Inc (TSLA.O), 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.
Source: Reuters / Reporting by David Shepardson; Editing by Bernadette Baum Our Standards: The Thomson Reuters Trust Principles.
Did You Know:
GMC is a manufacturer of a full line of SUVs, pickup trucks, vans, light-duty and medium-duty commercial trucks marketed in North America by General Motors. In the past, GMC also produced fire trucks, ambulances, heavy-duty trucks, military vehicles, motorhomes, and transit buses.
During the Second World War, GMC produced more than 600,000 trucks for use by the U.S. military. But GMC’s history actually dates back to December 22, 1901, when Max Grabowsky established a company called the “Rapid Motor Vehicle Company,” which designed and produced one-cylinder commercial trucks.
In 1909, the company was purchased by General Motors to form the basis for the General Motors Truck Company. The first GMC-branded truck was introduced at the New York International Auto Show in 1912. Today, although GMC’s vehicles are very similar to their Chevrolet siblings in most ways, GMC imparts a slightly more upscale feature set and styling palette. Longtime nameplates like the Yukon SUV and Sierra pickup are still around with no lag in popularity.
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