GM electric vehicle tax credit phase-out to begin this year: Report

By U.S. EconomyFOXBusiness

Trump slams GM for move toward electric cars

“Bulls & Bears” panel discusses President Trump’s comments on General Motors.

U.S. automaker General Motors will soon lose the ability to offer customers a discount on its electric vehicles, as Tesla cuts prices on all of its models to combat the same issue.

Continue Reading Below

GM hit a designated sales threshold – a cumulative 200,000 vehicles – which triggers a phase-out of the $7,500 federal tax credit for electric vehicles, Reuters reported on Wednesday, citing a person briefed on the matter. The automaker is said to have hit the sales figure in the fourth quarter, which suggests the credit will be halved – to $3,750 – around April. Following that timeline, the credit would fall further to $1,875 in October before being completely eliminated in April 2020.

After GM announced plans to shutter U.S. factories, the Trump administration threatened to cut subsidies to the U.S. automaker – including those for electric vehicles.

GM did not immediately return FOX Business’ request for comment.

It was widely expected the automaker would hit 200,000 in sales by early 2019.

More from FOXBusiness.com...

In a bid to boost profits, GM has narrowed its vehicle offerings, including a focus on its portfolio of electric models. It is scheduled to release two new electric cars in 2019, adding to a total of 20 by 2023.

Meanwhile, shares of Tesla plunged on Wednesday after the electric automaker announced it was slashing the price of its vehicles by $2,000 to combat the phasing out of the same federal tax credit. On Jan. 1, customers looking to purchase a Tesla were only eligible to receive $3,750 in tax credits after Tesla reached the 200,000 sales milestone last year. The credit will be entirely phased out by 2020.