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U.S. Government To Halve Federal Electric Vehicle Tax Credit For General Motors

Plug-in hybrid and battery-electric vehicles are eligible for the income tax credit of up to $7,500 thanks to the U.S. federal government. But when EV sales reach 200,000 examples of the breed, that sum halves to $3,750 for the next two quarters. Enter General Motors, which will find it hard to sell the Bolt starting on April 1st, 2019.
Chevrolet Bolt charging cable 26 photos
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Looking at the bigger picture, the Bolt has been slumping for quite some time now. Inventories are high, demand is low, availability in Europe is questionable considering that Opel and Vauxhall have been acquired by Groupe PSA, there’s a lot of problems to talk about. The most aggravating thing is, the Bolt for the 2019 model year retails at $36,620 plus $875 for destination.

Look at the 2019 Hyundai Kona Electric, offering more space and 20 more miles of range at $36,450 in the United States. It’s also gifted with cool styling and the practicality of a crossover, things that General Motors haven’t thought about when developing the Bolt.

Remember when the U.S. automaker promised to deliver two electric crossovers based on the Bolt? Neither is here with us, nor did General Motors offer more details in regard to hiccups in the development process. And thus, let’s turn our attention back to the federal tax credit.

Originating from an Obama administration policy put in place in 2008, the halving of the credit will see General Motors struggle to make a case for the Bolt moving forward. Tesla is facing similar difficulties, but demand for the Model 3 and Model Y doesn’t appear to slow down that much.

In October 2019, the credit will shrink to $1,875 before the U.S. federal government stops helping General Motors in April 2020. Because Hyundai appears to be at an advantage, let’s pause for a moment and remember the Trump administration plans to end the credits altogether.

The president and his team expect to save $2.5 billion over the course of ten years in this event, but the Democrats aren’t having it. In the best case scenario, the arch-rivals of the Republicans will make the credits unlimited. Other potential outcomes are to extend the credits for a period or to renew these benefits for General Motors and Tesla. Chief executive officer Mary Barra called for an extension, but only time will tell if Congress will take action.

 
 
 
 
 

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