GM CEO Says Incentives May Help America Transition to EVs

Matt Posky
by Matt Posky

General Motors CEO Mary Barra has chimed in on the weeklong open discussion about whether or not it’s a good idea for America to embrace the Biden administration’s EV tax credit plan, which just so happens to be deeply intertwined with the Build Back Better Act’s cavalcade of federal initiatives.

As we’ve already covered the topic more than once, we’ll avoid the recap and simply post the relevant links where Tesla CEO Elon Musk recommended pitching the entire bill into the trash and Transportation Secretary Pete Buttigieg went to bat for the White House by suggesting the updated tax scheme was a necessity for electrification to thrive. Barra opted to go with the latter take, stating that it could help accelerate EV adoption.

Though it’s hardly a surprise as GM is the automaker that has the most to gain from the revised EV tax incentive proposal. The company is the only manufacturer (other than Tesla) to have sold enough cars to exhaust the current federal quotas, making it ineligible to receive any more government-backed discounts on its electrified products. During the Obama administration, it was broadly assumed that the incentives would be used to help get the ball rolling on new-energy vehicles while they were so much more expensive than internal combustion cars.

However the Build Back Better Act (H. R. 5376) seeks to nullify those limitations by ending the vehicle quotas and permitting government aid to go on almost indefinitely. As things currently stand, Congress is considering phasing out the Biden tax credit scheme in 2032 or nixing payouts once U.S. electric vehicle sales exceed 50 percent annually (they’re currently under 2 percent). While some have framed this as wiping the slate clean, many other manufacturers (e.g. Toyota) have suggested this leaves the two automakers who already reached their quotas a decided advantage. But Tesla doesn’t support the updated tax incentive plan either, with Elon Musk insisting that EVs eventually need to stand on their own.

There are different versions of H. R. 5376 in the House and Senate and both carve out an extra $2,500-4,500 financial credit for vehicles manufactured by unionized labor. This sets up GM and Ford to receive up to $12,500 per vehicle by way of purchasing subsidies. Other companies (Tesla included) receive substantially less. But the House variant of Build Back Better also has provisions that could restrict exceptionally wealthy households or particularly expensive vehicles from taking advantage of the plan.

This is the one thing that could be a thorn in General Motors’ side were Build Back Better to pass. The gargantuan all-electric GMC Hummer is unlikely to retail below $80,000 in its most basic format. There are also fears that the upcoming electric pickups being plotted by Ford and GM may exceed the pricing cap in certain configurations. However Congress set financial bar highest for pickups at a pretty juicy $74,000 — almost like they were intentionally trying to assist legacy manufacturers.

Though Barra’s focus on Thursday was lower than that. Despite her company gearing up to sell extra large EVs with lofty price tags, she told the Automotive Press Association that the new EV tax incentives could be a blessing for those in the market for a $30,000 car (like the Chevy Bolt).

“Do those individuals need that support to make the transition? I think it’s reasonable if you’re trying to accelerate [EV adoption],” she said.

“That’s their only vehicle, and they depend on it. If they don’t get to work, it impacts their livelihood … Reaching that customer is where you’re really going to get scale, and I’m very proud that at General Motors, we do that with the Chevrolet brand, across the board, from trucks to the crossovers to smaller vehicles.”

As we haven’t seen GM’s upcoming value EVs, we’ll have to wait until the company showcases its launch plan at next month’s CES to see where they stand. Currently, the manufacture is supposed to release affordable compact and midsized electric crossovers as the first wave of 30 EV assault that’s supposed to conclude in 2025. But those only come after it’s launched the big-n-pricy Silverado and Hummer battery powered vehicles.

[Image: General Motors]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • 28-Cars-Later 28-Cars-Later on Dec 13, 2021

    Barra says more corporate welfare may help pad her annual bonus. "However the Build Back Better Act (H. R. 5376) seeks to nullify those limitations by ending the vehicle quotas and permitting government aid to go on almost indefinitely" Seriously though, this is because both gov't and OEMs know the gun-to-the-head approach is going to devastate the auto industry. If you search the bill, the word "electric" is present 488 times, but the part about credits does not start until "PART 4 GREENING THE FLEET AND ALTERNATIVE VEHICLES" (413/488 times of "electric"). So no more than 50% of price, nice. "The amount determined under this subsection with respect to any new qualified plug-in electric drive motor vehicle is the sum of the amounts determined under paragraphs (2) through (5) with respect to such vehicle (not to exceed 50 percent of the purchase price of such vehicle)." Looks like this is means tested, fortunately anyone with a pulse not in the top 1-3% is eligible: "(3) Threshold amount.--For purposes of paragraph (1), the term `threshold amount' means-- ``(A) $800,000 in the case of a joint return or surviving spouse (half such amount for married filing separately), ``(B) $600,000 in the case of a head of household, and ``(C) $400,000 in any other case."

    • Slavuta Slavuta on Dec 13, 2021

      you mean "Break Back Better Act"... the word “democracy” is present 0 (ZERO) times in Constitution and Bill of Rights. That is all we need to know.

  • JD-Shifty JD-Shifty on Dec 13, 2021

    "Yuan will be your world reserve currency."-It will be yours long before that

  • Wjtinfwb Funny. When EV's were bursting onto the scene; Tesla's, Volt's, Leaf's pure EV was all the rage and Hybrids were derided because they still used a gas engine to make them, ahem; usable. Even Volt's were later derided when it was revealed that the Volt's gas engine was actually connected to the wheels, not just a generator. Now, Hybrids are warmly welcomed into the Electric fraternity by virtue of being "electrified". If a change in definition is what it takes, I'm all for it. Hybrid's make so much sense in most American's usage patterns and if needed you can drive one cross-country essentially non-stop. Glad to see Hybrid's getting the love.
  • 3-On-The-Tree We also had a 1973 IH Scout that we rebuilt the engine in and it had dual glass packs, real loud. I miss those days.
  • 3-On-The-Tree Jeff thanks. Back in 1990 we had a 1964 Dodge D100 with a slant six with a 3 on the tree. I taught myself how to drive a standard in that truck. It was my one of many journeys into Mopar land. Had a 1973 Plymouth duster with a slant six and a 1974 Dodge Dart Custom with 318 V8. Great cars and easy to work on.
  • Akear What is GM good at?You led Mary............................................What a disgrace!
  • Randy in rocklin I have a 87 bot new with 200k miles and 3 head gasket jobs and bot another 87 turbo 5 speed with 70k miles and new head gaskets. They cost around 4k to do these days.