GM Also Hits 200,000 EV Sales, Buyer Tax Credit Drops to $3,750 April 1

GM Also Hits 200,000 EV Sales, Buyer Tax Credit Drops to $3,750 April 1

General Motors has reached 200,00 sales of electric vehicles and plug-in hybrids as of the fourth quarter of 2018, triggering an April 1 reduction of buyer tax credits from $7,500 to $3,750. Once the cap is reached, buyers get the cap-reached quarter and the next quarter with the full credit. Then (April 1, 2019, for GM), the credit drops to $3,750 for two quarters, to $1,875 for two more quarters, and then it’s gone as of April 1, 2020.

Tesla was the first automaker to bump up against the 200,000-sales cap, hitting it early in the third quarter of 2018. The Tesla tax credit dropped to $3,750 Jan. 1 and expires Jan. 1, 2020. To partly compensate for the drop, Tesla cut the price of all cars by $2,000.

The Chevrolet Bolt EV, the current mainstay of GM electrification efforts. Ironically, the Chevrolet Volt plug-in, which is being discontinued, accounted for as many sales as the Bolt EV, 15,000-16,000 each last year.
The Chevrolet Bolt EV, the current mainstay of GM electrification efforts. Ironically, the Chevrolet Volt plug-in, which is being discontinued, accounted for as many sales as the Bolt EV, 15,000-16,000 each last year.

After Tesla and General Motors, it may be a year or two until the next automaker hits the cap. Based on current sales, Nissan would be the next to hit it, in late 2020 or 2020. Sales of the Nissan Leaf should pick up with the 2019 arrival of a longer range Nissan Leaf. Nissan has argued that most motorists don’t need more than 150 miles of battery range for the kinds of driving you do in an EV and that’s the range of the current Leaf with a 40-kWh battery pack. It is expected to deliver a 60-kWh Leaf this year and probably will keep the existing Leaf as a cheaper option.

Here’s our estimate of cumulative sales of EVs and plug-in hybrids combined. The two are combined for tax credit purposes. The rule is you need at least 16-kWh of battery power onboard to qualify for the maximum US tax credit:

Cumulative EV Sales Through 2018

  1. Tesla, 285,000 sales (hit cap July 2018)
  2. General Motors, 205,000 (hit cap November 2018)
  3. Nissan, 130,000
  4. Ford, 115,000
  5. Toyota, 95,000
  6. BMW Group, 85,000

Interestingly, it’s BMW (including Mini and Rolls-Royce) that has the widest range of EVs and plug-in hybrids. The Ultimate Driving Machine company knows that electric motors are the perfect power complement to the combustion engine because motors reach maximum power (torque) at zero rpm as the traffic light goes green, while combustion engines peak at 2,o00 to 4,000 rpm. BMW has also sold diesels as great performance/economy vehicles, but Dieselgate has tarred even the companies not directly affected.

Critics say plug-ins are too complex to be successful long-term. Whether or not that’s true, they’re one way to provide efficient driving with both economy and performance for the next decade. The Toyota Prius Prime was the best-selling PHEV and second best among electrified vehicles after Tesla Model 3, with about 25,000 sold. The Chevrolet Volt and Honda Clarity PHEV were vying for runner-up in PHEV sales with about 15,000-16,000 sold each.

Cadillac CT6 Plug-In: For GM, all brands count toward the 200,000 sales limit. The CT6 contributed about 225 2018 sales toward the cap.
Cadillac CT6 Plug-In: For GM, all brands count toward the 200,000 sales limit. The CT6 contributed about 225 2018 sales toward the cap.

Big automakers are at a disadvantage because the 200,000 sales cap is for all the automaker’s brands. In GM’s case, the 200,000 is spread over Chevrolet, Buick, Cadillac, and GMC. The same holds for Toyota-Lexus, Nissan-Infiniti, Ford-Lincoln, Hyundai-Kia, and VW Group (12 brands including Audi and Porsche). Or said the other way, the handful it helps are the standalone EV brands that make it through the infant mortality years. Tesla has been around 15 years. Faraday Future dates to 2014, but in the past year has laid off almost 40 percent of its employees. Fisker Automotive was founded in 2007, produced about 2,000 EVs, went bankrupt, and had its assets purchased by Wanxiang Group in 2014.

The two most recent EV startups, able to learn from the miscues of others, are Byton (crossovers and sedans) and Rivian (SUVs and pickup trucks). They, too, will get a shot at taking advantage of the 200,000-vehicle tax credits as they come to market around 2020, both companies say.

If you’re looking at taking advantage of the federal tax credit, know this: It is a tax credit of up to $7,500, meaning you get back up to $7,500 in federal taxes for the year you bought your EV or PHEV. The only electrified vehicles that don’t qualify are hybrids with small batteries and motors that propel you 1-2 miles. You need to have owed $7,500 or more in taxes in that year to get the credit. It can’t be taken over multiple years. It is good for either an outright purchase, a loan purchase, or most leases. Lessees don’t get the credit directly, but the leasing company should credit the amount against your lease payments. Ask to see the paperwork. The credit goes only to the original purchaser; there is no EV credit for used cars.

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