When the Biden administration proposed a $174 billion investment into electric vehicles, automakers had high hopes that there would be a carve-out for tax credits. And indeed, the plan does indeed allocate additional funds for consumer rebates. Unless changes are made, however, GM could be one of the companies whose customers would not be eligible for the credit. Now, company execs want the government to let them qualify.
GM and Tesla customers are not eligible for a $7,500 tax credit on electric car purchases because both companies have exceeded 200,000 total EV sales. GM reached that number in 2018, and rebates on lesser amounts were available until April 2020. Meanwhile, other companies can effectively sell their cars with a built-in $7,500 “discount” because their customers still qualify for the credit.
According to Automotive News, GM president Steve Carlisle argued during a virtual panel, “Given all the potential barriers to adoption and the fact that we need to get moving along that curve… A level playing field is a reasonable thing to aspire to.”
The same article noted that GM CEO Mary Barra said in a recent CNBC interview, “We’d like to see that [200,000 limit] lifted and let the marketplace decide and not penalize first movers.”
Government tax rebates would have implications for upcoming GM models as well, like the sub-$60,000 Cadillac Lyriq and $80,000 Hummer EV. Like many automakers, GM has pledged full-electrification of its lineup by the mid 2030s.
The original purpose of the tax rebates was to make electric vehicles, which tend to be more expensive to build (for now), competitive with their gasoline-powered counterparts. The incentive was there to encourage an EV purchase, like a Chevy bolt, rather than a similarly-sized and equipped ICE car. However, it could be argued that those using the credit on a loaded $100,000 Hummer or Tesla Model S are not acting in the spirit of the program.
The remainder of Biden’s EV budget will go items like to building charging infrastructure, helping automakers secure raw materials for EV construction, and updating government vehicles to EVs, calling out diesel transit vehicles and school buses in particular. Notably, the $100 billion in rebates will apply to American-made EVs.
We just hope that Biden’s plan has a way keep enthusiasts cars like his own 1967 Corvette street legal for many years to come.