Now that April has begun, General Motors has reached the end of its Federal EV tax credits allotted for its electric cars.
For those unaware, the EV tax credit helps alleviate the higher cost of electric cars when compared to ICE cars by providing the consumer with a tax rebate of up to $7,500 (all fully electric cars are eligible for the full amount while plug-in hybrids will have their amount determined by their all-electric range and MPG).
However, the rebate is not infinite and starts to widdle down once an automaker produces 200,000 cars that qualify. After that, the phase-out process will start and the full $7,500 credit will be available for the quarter which the 200,000 was reached and the quarter after that. The credit will then half to $3,750 for two quarters before halving again to $1,875 for two quarters. After that, the automaker is no longer eligible for the credit. The chart below from EVAdoption does well to illustrate the point.
With April being the start of a new financial quarter, General Motors’ previous $1,875 tax credit has ceased and is no longer eligible.
General Motors now joins Tesla as the only automakers currently who have run through their credits. A distant third is Nissan who has only produced about 140,000 cars, meaning they will probably be safe for another year before their phase-out starts.
Unlike Tesla, General Motors did not really make full use of the credit to expand its electric lineup. At the time of Tesla’s phase-out, the company had solidified the Model S, X, and 3. GM on the other hand only has the Bolt to show their efforts, along with the discontinuation of the Chevy Volt, their only other promising electric car.
The federal EV tax credit has faced some controversy as early adopters were helped when compared to prices of gasoline cars, but burned through their tax credits while electric vehicle technology matured. Now those who got early into the game will face a disadvantage when it comes to the prices of companies introducing electric cars later into the game.
Do you feel like GM wasted their credits? Does the system now give an advantage to companies introducing electric cars currently as compared to early adopters? Let us know down in the comments below.