Industry News: The End is Nigh: GM and Tesla Get Closer To Losing $7,500 Tax Credit

[William Maley]

Tesla and General Motors lead the pack when it comes to the sales of plug-in vehicles. Data from Automotive News says Tesla stands at 193,344 vehicles, followed by GM at 181,062, But there arises a problem; once they cross the 200,000 mark, the phaseout of the $7,500 tax credit begins. Tesla is expected to be first with some predicting it taking place next month (provided they don't run into more production troubles). GM will follow sometime next year.

Barring some sort of extension of the program, it will put the two automakers in a bit of bind where they'll be playing on an uneven playing field due to increased costs. It should be noted that the tax credit won't disappear. The way the phaseout works is that the $7,500 credit sticks around for two more quarters after the 200,000 mark is reached. After that, the credit is cut to $3,750 for the next two quarters, then it drops to $1,875 for two more quarters before it is gone.

"The groundbreakers, the people who forged ahead and got these products out there first, could be at a significant disadvantage now. I don't think it's fair to reward a company that hasn't been as innovative with an incentive that begins when someone else's ends," said Rebecca Lindland, executive analyst at Kelly Blue Book.

Industry experts expect GM to take a bigger hit than Tesla due to the credit affecting decisions on "lower-priced vehicles such as the sub-$40,000 Chevrolet Volt more than a $75,000-plus Tesla Model S or X" according to research done by the Institute of Transportation Studies at the University of California-Davis.

A study in 2016 bears this out. 40 percent of Chevrolet Volt buyers admit they wouldn't have purchased one without the tax credit. Only 14 percent of Tesla buyers say the same. 

This likely explains why various GM executives have been pushing the White House for a possible extension of the credit.

"At the end of the day, we think having the benefits is great for the customer, because obviously it makes the EV adoption easier and more attractive," GM North America President Alan Batey told Automotive News.

Source: Automotive News (Subscription Required)

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[Suaviloquent]

There we go again GM fully knew the rules and is now complaining because they couldn’t take advantage of it properly.

 

this is why the Bolt is so underwhelming. GM insisted in doing little for charging infrastructure and now they’re crying.

i disagree - for electric cars to ever be competitive automakers must INNOVATE and find a way to NOT rely on incentives for the consumer.

i also agree though that the gas tax really needs to be increased and oil subsidies need to die, plus OPEC needs to be embargo’d.

 

do that and every automaker will quit on gas within 1 model year and go all-in on electric.

[riviera74]

Embargo OPEC?  Good luck with that.  I am not sure the Permian basin in Texas and and all the crude in Alaska will satisfy American needs for 20 years, let alone 50.

I would support a VAT on crude oil so that all Americans can dump the ICE vehicles for an EV for this reason: we should be using less crude period.  If every passenger car was an EV, there would be no need for us to worry about gas prices again.  Then the USA could join and (possibly) take over OPEC and run it as we see fit.

As for oil subsidies, those needed to die when oil was $10 a barrel 20 years ago.  The second best time is right now.

[G. David Felt]

16 minutes ago, riviera74 said:

Embargo OPEC?  Good luck with that.  I am not sure the Permian basin in Texas and and all the crude in Alaska will satisfy American needs for 20 years, let alone 50.

I would support a VAT on crude oil so that all Americans can dump the ICE vehicles for an EV for this reason: we should be using less crude period.  If every passenger car was an EV, there would be no need for us to worry about gas prices again.  Then the USA could join and (possibly) take over OPEC and run it as we see fit.

As for oil subsidies, those needed to die when oil was $10 a barrel 20 years ago.  The second best time is right now.

If we wanted too, we could so cut off OPEC and then move forward with better ways of getting around.

https://www.eia.gov/tools/faqs/faq.php?id=727&t=6

Per our own gove, we produce almost all we need now, yet the oil companies love to import the oil, refine it to finished products and export it to Europe or the Asian rim.

[regfootball]

inevitably, what is lost in funding the gas tax has to be made up with EV's and make no mistake, they will (states and feds) go for the jugular on taxing EV's once they become closer to mainstream.

we should be at a point right now where EV charging network development is taking place, but for some reason, it's not.  We need EV charging locations as convenient and plentiful as gas pumps, and we need to be able to fill cars in a short time.

It would be nice if the charging types and networks were global in some way so we don't have differing standards across the pond.

Part of me believes this horse chasing autonomous vehicles has taken development money away from making battery development cheaper and more miles.  On some sick level, the Dr. Evils of the world really want all vehicles autonomous.  As much for nefarious reasons as not.  

I would otherwise foresee that no matter how well developed battery tech and changing networks become, I don't see ICE cars going away in the US at least for 30-40 years.  So we have to figure out how to get our roads and charging / fuel networks to coexist for either and function that way for the next 30-40 years.  That also includes revenue for roads, bridges etc.  That money has to come from gas and EV drivers both.

Edited June 25, 2018 by regfootball

[G. David Felt]

Eventually milage tax will be what replaces fuel tax.

[balthazar]

36 minutes ago, regfootball said:

inevitably, what is lost in funding the gas tax...

There is no loss.

they will (states and feds) go for the jugular on taxing EV's once they become closer to mainstream.

Well duh- that's the 1st thru the 1000th reason for Gov't to exist.

[regfootball]

37 minutes ago, dfelt said:

Eventually milage tax will be what replaces fuel tax.

and then coupled with huge rise in electricity rates we'll be back at square one and EV's won't be cheaper to drive than gas

[Drew Dowdell]

1 hour ago, regfootball said:

Part of me believes this horse chasing autonomous vehicles has taken development money away from making battery development cheaper and more miles.  On some sick level, the Dr. Evils of the world really want all vehicles autonomous.  As much for nefarious reasons as not. 

I can put that one to bed right now.

We have multiple autonomous vehicle companies working here in Pittsburgh.  Both Uber and Argo AI have R&D centers here, Google is up to something here with AD, and Carnegie Mellon University was one of the first to get a fully autonomous system functioning.  I've ridden with one of the Argo engineers. 

This picture of an Argo AI Ford Fusion was not taken by me... but it could have been. It is the intersection where my office in downtown is. 

There is a reason they use exclusively Fusion Hybrids and Volvo XC90 Hybrids... it's not for fuel efficiency.  Plug-In Hybrids are the only vehicles with enough electrical reserve to run all of the electronics required for fully autonomous driving.  That's why GM went with a self-driving Bolt and not a self-driving Cruze. 

The autonomous developers want bigger capacity batteries just as much as everyone else. 

[Robert Hall]

Cool...I often saw Uber and others testing such Fusions and Bolts around my office in downtown Scottsdale. 

[daves87rs]

Somehow, I think GM lowering the price a bit (and hopefully getting some COD back) is going to keep the bolt going just fine...

Gas prices will be on the rise again....I promise you.

Just look past the hype and fear.....?

[balthazar]

Do you think, perhaps, the whole 'gas prices are going to skyrocket' thing is a bit of 'hype & fear', too?

I've been reading that prediction here for over 8 years now.

Diesel by me was 3.03 a few days ago, and that's with the very recent 25-cent tax spike on it from the state.
Costco has regular @ 2.60/gal.

Edited June 26, 2018 by balthazar

[ocnblu]

This is so sad.  Someone direct me to the nearest safe space so I can meditate and hopefully... one day... recover.

[G. David Felt]

1 hour ago, ocnblu said:

This is so sad.  Someone direct me to the nearest safe space so I can meditate and hopefully... one day... recover.

Welcome to a NEW DAY, No Safe Space, No Recovery, No Meditation,

It is a NEW DAY Boys n Girls! 

 

[ocnblu]

pffft

 

[daves87rs]

On 6/25/2018 at 11:34 PM, balthazar said:

Do you think, perhaps, the whole 'gas prices are going to skyrocket' thing is a bit of 'hype & fear', too?

I've been reading that prediction here for over 8 years now.

Diesel by me was 3.03 a few days ago, and that's with the very recent 25-cent tax spike on it from the state.
Costco has regular @ 2.60/gal.

Nope...we are due. Koch brothers need to make some more money before they lose some the the "charged" pack....

[G. David Felt]

I honestly see GM eventually reducing the price on the Bolt and Volt in relation to dropping fed credit. Plus new EV models will help continue to drive the market forwad.