By on May 10, 2021

General Motors is asking the federal government to reset the federal EV tax credit system, effectively requesting a personal favor. As one of the first manufacturers to get an electric vehicle to market that people actually wanted to buy, GM hit the 200,000 cumulative EV sales cap in 2018. While customers could still get money back through April of 2020, the automaker exhausted its allotment of $7,500 subsidies before most of its rivals.

Now it wants to see the government press the reset button on the program under a pretext of fairness. GM executives are claiming that companies investing in electrification shouldn’t be handicapped by not getting additional money from taxpayers. It seems anything but fair, frankly. Though it should be said that all-electric models have a poor track record in terms of profitability. The Chevrolet Bolt certainly didn’t make any money, however, GM CEO Mary Barra has said new versions of the model will be capable of turning a profit. 

Ideally, the company would like to keep you thinking about the cheaper Bolt — and not six-figure Hummer EV and $60,000 Cadillac Lyriq that are coming out within the next 12 months — as you ponder this issue.

Automakers that have exhausted their sales quota (just GM and Tesla) have already received at least $1.5 billion in subsidies from the government under the program, plus whatever else they managed to eke out during the phase-out period. The whole point of the scheme was to soften the burden of manufacturers who were transitioning to EVs and incentivize consumers to become early adopters of the technology. But now GM is allegedly on the cusp of selling Cruises that actually make money and it wants to start the whole credit system over while it’s still in the lead.

“Incentives are an important consideration at the phase that we’re in,” Steve Carlisle, president of GM North America, said during the Automotive News‘ Congress Conversations virtual event.

“Given all the potential barriers to adoption and the fact that we need to get moving along that curve, I think incentives in many different forms enter into the conversation,” he continued. “A level playing field is a reasonable thing to aspire to.”

Automakers are always going to support handouts and try will always try to con elected officials into giving them preferential treatment. It’s just what multinational corporations do. But it’s getting to the point where it is expected that any businesses clever enough to engage in some greenwashing should get piles of money. We’re sympathetic to fines and know it’s becoming increasingly difficult to build automobiles that don’t conflict with the emissions regulations of at least one country and open a manufacturer up to penalties. Unfortunately, government handouts are becoming as ridiculous as the round-robin carbon credit system that effectively just makes it easier for companies with deeper pockets to pollute. It’s getting farcical across the board and the general populace really needs to wake up and smell the nonsense.

Though it isn’t just consumers that seem oblivious. Several automotive outlets reporting on the story came out to support General Motors, with at least one appearing to suggest that EV tax credits should be extended to all automakers indefinitely.

During a recent interview with CNBC, Chief Executive Barra said that her company shouldn’t be penalized (by getting the same amount of taxpayer money as every other manufacturer) just because it was quicker at exhausting the 200,000 vehicle quota. She acknowledged that $7,500 would undoubtedly influence customers buying future EVs, noting that GM would no longer be eligible under the old Obama-era credit system.

The company has asked the Biden administration to reset them, with Tesla likely in quiet agreement — as the decision would also be a boon for its bottom line.

While we cannot say whether the White House will go for the proposal, primarily because it would make it seem as though it’s playing favorites, it is definitely interested in accelerating EV adoption. Joe Biden has introduced a $174 billion proposal tied to the gigantic infrastructure plan that would allocate over half of the funding for customer rebates and expanding the United States’ charging network. The administration has also mentioned the reintroduction of Cash for Clunkers programs that would specifically target electric cars.

[Image: Michael Urmann/Shutterstock]

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40 Comments on “General Motors Asks Government to Change Rules on EV Tax Credits...”


  • avatar
    Imagefont

    GM isn’t even trying to build an affordable EV and electric Hummer buyers for DAMN sure don’t deserve a rebate. What a bunch of malarkey!

  • avatar
    Land Ark

    I always thought the credit was incentive to encourage companies to start making EVs. I didn’t think it was supposed to be there to sustain continued development of EVs once established. I also thought it was supposed to help smaller companies which weren’t going to be able to compete with the established companies to enter the market. I doubt GM would have been Tesla’s side if they had come out to suggest changing it when GM was still 100k cars from the limit.
    GM’s not being penalized, they were able to get all the same credit per car as everyone else. They weren’t complaining when they were outselling Ford previously.

    I’m not for an unending incentive program because it dissuades the car companies from finding cheaper, more efficient ways of producing EVs.

    • 0 avatar
      stuki

      The credit, like all “credits”, was there to do what governments in financialized dystopias do: Take from the productive, and hand to the connected. The res is just PR stunts aimed at suckering the hopelessly indoctrinated to believe theft is somehow a-ok thiiiiiz tiiiiiime, just like all the other times.

  • avatar
    FreedMike

    Well, they can ask…

    • 0 avatar
      rudiger

      That was my first thought, as well, i.e. worth a shot. They sure as hell weren’t going to get it from the previous administration, that’s for sure.

  • avatar
    SCE to AUX

    The 2009 law did what it was supposed to do, and should not be extended.

    If you want the government wants to pick winners, then go ahead and extend the program.

    “Automakers that have exhausted their sales quota (just GM and Tesla) have already received at least $1.5 billion in subsidies from the government under the program”

    The only payments to these companies that I’m aware of would be for leases. Consumers who actually purchased are the ones who got subsidies in the form of tax breaks.

    • 0 avatar
      stuki

      If I pay you a million dollars, specifically to incentivize you to pay a million for a certain type of tennis socks that my favorite lobbyist sells
      as opposed to cheaper ones others sell at competitive prices, I am very much paying money to said lobbyist’s tennis sock racket. Childish attempts at petty obfuscation, is exactly not relevant at all.

  • avatar
    ajla

    Subsidize me.

  • avatar

    she is horribly weak, useless, and pathetic.

  • avatar
    DedBull

    If you want to really make the tax credit effective, make it refundable. Cut it from 7500 to 4-5000 and make it refundable.

    • 0 avatar
      jalop1991

      DedBull: “If you want to really make the tax credit effective, make it refundable.”

      This is a point most people, including blog writers, don’t understand. The $7500 tax credit is not fully refundable.

      What does that mean? It means that the tax credit will refund you whatever your tax obligation is for that year, UP TO $7500.

      Ponder that for a moment. Do you know what kind of income you must have to incur a $7500 tax obligation? Go on, look at your tax return. Look at the line that says “your total tax is”. That’s what you’d be credited for based on your plug-in purchase. Not $7500. Now figure out how much more income you must have to make that line $7500.

      This $7500 plug-in tax credit is just a way to transfer public monies to wealthy people.

      • 0 avatar
        ttiguy

        Most working adults pay way more than 7500 in federal income tax. Not exactly “wealthy” in any way. This covers a wide range of people

      • 0 avatar
        Oberkanone

        Filers in $75,000 to $100,000 adjusted gross income on average paid $7390 Federal Income tax.

        The most common adjusted gross income in the US fell between $50,000 and $75,000 in 2018. Within this income segment, the average annual income tax paid was $4,688.

      • 0 avatar
        Scoutdude

        You are correct that many people have less than $7500 in tax liability. Of those a lot of them couldn’t afford to buy a new car anyway.

        However the fact is that it does discriminate against those people who live in an area with a low cost of living and corresponding wages.

        • 0 avatar
          DedBull

          I am one of those people living in a low cost of living/low wage area. My wife and I have a combined gross income in the 80K range, and have 2 kids. After standard deduction and child credit, my effective tax is less than 2,000. for a point of reference, my 30 yr mortgage on an old 2000 sqft home is $390/mo. I commute 40 mi one way on rural roads each day, and would love an EV, but the mythical $7500 would never be available to me.

          • 0 avatar
            Scoutdude

            If they made it so you could carry it over then it could mean something to you, which I think is a better idea than making it refundable.

            Meanwhile out on the coast the cheapest house currently listed in my county in the 1900-2100 sq ft range is $450k and at the minimum it needs the 20+ year old carpet replaced and a full interior paint job.

            Now if you want something ready to go and in a little nicer area be prepared to spend at least $700k and more like $800k.

      • 0 avatar
        stuki

        “This $7500 plug-in tax credit is just a way to transfer public monies to wealthy people.”

        All government is just a way to transfer less connected people’s money to more connected people. Connectedness, just like all else, is a perfectly normal economic good: You get as much of it as you pay for. Which resolves to……

  • avatar
    kjhkjlhkjhkljh kljhjkhjklhkjh

    JEBUS H CHRISTOS … just up the GD gas tax until people stop buying gas cars. And or start taxing EVERY car that leaves the plant that is NOT hybrid+ or get 40MPG *COMBINED* millage as driven by a teenager ..

  • avatar
    Art Vandelay

    Naa

  • avatar
    mcs

    I’d be in favor of cutting the present subsidy program completely. In its place, put in a new program that only applies to EVs that meet certain criteria. Must have final US assembly with a TBD% US content. The manufacturer must have a charging network of TBD size, and a battery that maintains 95% of its life after 1,000 discharge cycles. Maybe tack on a 4.5 mile/kWh efficiency rating too. In other words, offer a subsidy, but make them work for it and limit it to models that meet certain criteria.

    • 0 avatar
      stuki

      ….Must have PC, and Make America Dumb Again written in big rainbow letters. And be “owned” by some clown on K street. And some CJT or STH of CEO must say wow things. Like, technology, like yo know! And like inveeeest in, like, stuff!!!!

  • avatar

    Gas prices in Bay Area are approaching $5 per gallon. It is time to act. Dump you ICE vehicle and buy new EV. Uncle Joe, if not now then when? Vote for infrastructure project.

    • 0 avatar
      jalop1991

      “Gas prices in Bay Area are approaching $5 per gallon. It is time to act. Dump you ICE vehicle and buy new EV.”

      And watch your Kalifornia electric rates, already the highest in the nation, triple or worse overnight.

    • 0 avatar
      stuki

      It’s specifically not time to dump perfectly functional and efficient vehicles. Buying a new EV, several in fact, sure! They make all the sense in the world in the Bay Area. At least in the in-close parts.

      Start by getting renting Birds. Then, for longer trips, get a pedelec, for the large number of trips where those are as quick, at least, door to door as anything bigger. Then an emoto for going a bit further. Then a (predominantly) city car, which has either rwd or hub motors up front, so it can turn around in little more than its own length. All those serve common-to-Bay-Area transportation tasks better than a big ICE vehicle optimized for schlepping it hundreds/thousands of miles at high speed.

      Add all those up, and you’re still not really spending anything untowards, since battery electrics only get problematically expensive when they are pretending to be able to do what that ICE you already own, does perfectly efficiently already.

  • avatar
    Oberkanone

    Tesla net worth as of May 07, 2021 is $647.71B

    EV manufacturers don’t deserve government subsidies.

    • 0 avatar
      stuki

      In a financialized Dystopia, prices, the one you mentioned included, serve only as a mechanism for the central bank to do its job: Transferring all wealth: From productive people, to idle leeches who live off of doing exactly nothing useful whatsoever. They don’t really have any relation to anything as economically meaningful as sales, value, nor anything else. Hence aren’t really affected, at least not in anything even remotely resembling a direct way, by subsidies.

  • avatar
    conundrum

    I guess everyone forgets that what’s good for GM is good for the country and vice versa. That was the gist of a statement made by some GM dude Eisenhower hired to be a Cabinet secretary back in the 1950s.

    Having benefited from the subsidy on 200,000 electric vehicles, GM now casts covetous eyes at every other manufacturer getting the same free ride it has already enjoyed. Being in big business these days seems to bring out feelings of entitlement to make a profit without risk. And risk-averse defines GM. Unable to compete worldwide, it has withdrawn from Europe, South Asia and Australia to only make vehicles for North America and China, where a tidy profit can be virtually guaranteed. No sense of competitive urge, no entrepreneurial spirit, they quit when the going gets tough. And then rattle their tin cup with two pennies in it for extra government subsidies they do not deserve. Aw, is life really that tough, Ms Barra?

  • avatar
    28-Cars-Later

    “The Chevrolet Bolt certainly didn’t make any money, however, GM CEO Mary Barra has said new versions of the model will be capable of turning a profit.”

    She’s super cereal this time.

  • avatar
    Morea

    It’s UBI for the auto industry.

  • avatar
    ponchoman49

    Turncoat Barra can go pound salt with her 20 plus billion take home profits pushing her triple zero fantasy and profits above all else. No more bailouts and no more subsidies for GM. If her amazing wonderful “everybody in” electric cars are so wonderful subsidies shouldn’t be needed.

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