On April 1, General Motors’ federal electric car tax credit will be cut in half from up to $7,500 to $3,750. It leaves the Chevy Bolt EV without full federal incentives against rival electric cars.
The automaker said Thursday that it will not reduce the electric car’s price due to the tax credit cut, according to Reuters. GM is the second automaker to reach the threshold for the federal electric car tax credit after Tesla. GM sold its qualifying 200,000th electric car late last year, which triggers a sunset period for the tax credits. Crucially, GM’s rivals such as Nissan and Hyundai that both sell electric cars, still have the full $7,500 credit at their disposal.
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Instead of cutting prices, a GM spokesperson said it will work with dealers to make the Bolt EV more affordable for customers shopping Chevy’s electric vehicle. For example, Chevy is currently offering 14 percent off of the suggested retail price. More offers like the current incentive are expected to keep the Bolt EV competitive. It’s a different response than Tesla, which cut prices on the Model 3 sedan by a several thousand dollars after it lost the full $7,500 tax credit.
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The Bolt EV, and any qualifying GM vehicles in the near future, will be eligible for a $3,750 tax credit for the next six months after April 1. In October, the tax credit will halve itself again to $1,875. The $1,875 tax credit will be available for another six months until the credits completely run out in April 2020. GM and Tesla have lobbied Congress to extend the tax credits.
The end of GM’s credits come as the automaker begins to push further into its electric future with plans for 20 new electric cars by 2023. It’s unclear how many of the new EVs will be sold in the United States as China makes up a far larger market for electric vehicles.
GM announced last week that it plans to build a second Chevy electric car in Michigan based on the Bolt EV’s platform and Cadillac will launch its first electric car around 2021.
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