Anticipating 200k Volt Sales, GM Pushes Against EV Tax Credit Cap

Edward Niedermeyer
by Edward Niedermeyer

The Federal tax credit for purchasing an electric vehicle is good for up to $7,500 off your next tax bill, under current provisions. But it won’t last forever: each manufacturer can sell 200,000 EVs and plug-ins with the federal rebate, but after that, consumers must pay full price (less any state incentives). And though GM will produce only 10k Volts in 2011, and only 45k units in 2012, its Vice Chairman Tom Stephens is already agitating for the 200k unit limit to be lifted. Optimistic much?


Stephens argument to the Detroit News: subsidies for the first 200k units will only nurse electric vehicles forward through the first generation of products. The implication, of course, is that EVs and plug-ins are not going to be economically viable even by the second generation of products, and will need ongoing support. So much for the promise that EV and plug-in subsidies were a “bridge” to a viable next-generation of eco-mobiles. Meanwhile, by the time GM, Nissan, Ford, and every other EV-hawking OEM hits the magic 200k volume mark, American taxpayers will have spent around $1.5b per manufacturer on these subsidies. With, apparently, little to nothing to show for it in terms of making the second generation of plug-ins more palatable to consumers.

But the push to pile on EV subsidies doesn’t end with a proposed lifting of per-manufacturer caps. Rep Debbie Stabenow (D-MI) tells the DetN that

she wants to “front-load” the $7,500 tax credit for purchasers of electric vehicles — so like “Cash for Clunkers” consumers could get the money deducted from the price of a new vehicle at the dealership.

Currently, owners must file for the rebate when they file their tax returns. Some wealthy owners of electric vehicles won’t qualify for the rebate, advocates say, because of the alternative minimum tax.

Because someone has to think of the wealthy. After all, even with existing tax credits, they’re the only demographic capable of blithely spending upwards of $30k for a car that makes an eco-friendly statement far better than it recoups its price premium in fuel savings. Stabenow also supports jacking up the tax credit to $10k per vehicle, as part of the Roadmap to Electrification, an incentives and infrastructure bill that could cost taxpayers about $124b.

Sooner or later, however, EVs will have to stand on their own and compete against other drivetrains on a level playing field. Loading up more incentives now, and guaranteeing them further into the future won’t stimulate innovation, it will stifle competition. Besides, no manufacturer is even close to selling 200k plug-ins, so calls for a tax credit extension are hugely premature. Let’s let the current generation roll out with the current incentive, and let the market work for a few years before making government policy. Once we know how the market respond to EVs under the current circumstances, the government will better understand their value and can formulate more sensible, effective regulation from there.

Edward Niedermeyer
Edward Niedermeyer

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  • Steven02 Steven02 on Oct 14, 2010

    I don't agree with making a 200k limit on the cars. That would be ridiculous. But excluding certain tax brackets is also a dumb thing to do. We aren't talking about the super rich, they aren't likely to buy this car anyway. But tax credits to people who buy Prius and other vehicles with gov't subsidies loose them when they make too much money. AMT effects many more people today. People who consider themselves middle class. Painting a broad stroke here calling them rich is ridiculous.

  • Nonce Nonce on Oct 15, 2010
    The implication, of course, is that EVs and plug-ins are not going to be economically viable even by the second generation of products, and will need ongoing support. No, the implication is that he wants more money. Now, although I'm a fan of electric cars, I think that 200,000 cars * $7500 each is already generous. I'd rather have a more economically efficient way of providing support, like a bigger gas tax.
  • TCowner We've had a 64.5 Mustang in the family for the past 40 years. It is all original, Rangoon Red coupe with 289 (one of the first instead of the 260), Rally Pac, 4-speed, factory air, every option. Always gets smiles and thumbs ups.
  • ToolGuy This might be a good option for my spouse when it becomes available -- thought about reserving one but the $500 deposit is a little too serious. Oh sorry, that was the Volvo EX30, not the Mustang. Is Volvo part of Ford? Is the Mustang an EV? I'm so confused.
  • Mikey My late wife loved Mustangs ..We alway rented one while travelling . GM blood vetoed me purchasing one . 3 years after retirement bought an 08 rag top, followed by a 15 EB Hard top, In 18 i bought a low low mileage 05 GT rag with a stick.. The car had not been properly stored. That led to rodent issues !! Electrical nightmare. Lots of bucks !! The stick wasn't kind to my aging knees.. The 05 went to a long term dedicated Mustang guy. He loves it .. Today my garage tenant is a sweet 19 Camaro RS rag 6yl Auto. I just might take it out of hibernation this weekend. The Mustang will always hold a place in my heart.. Kudos to Ford for keeping it alive . I refuse to refer to the fake one by that storied name .
  • Ajla On the Mach-E, I still don't like it but my understanding is that it helps allow Ford to continue offering a V8 in the Mustang and F-150. Considering Dodge and Ram jumped off a cliff into 6-cylinder land there's probably some credibility to that story.
  • Ajla If I was Ford I would just troll Stellantis at all times.
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