GM Hits Federal Tax Credit Phase-Out Of 200,000 EVs Sold In U.S.

DEC 15 2018 BY MARK KANE 47

It will be more difficult for GM to compete soon.

According to our estimates (see Monthly Plug-In EV Sales Scorecard), General Motors crossed the mark of 200,000 plug-in electric car sales in the U.S. before the end of November 2018.

The 200,000 sales is the magical number, which triggers the phase-out of the federal tax credit of up to $7,500. Even if not all customers applied for the tax credit or if there is some delay between sales and the federal tax credit tally, the 200,000 will be fact in this quarter.

This means that:

  • by the end of March 2019: full $7,500 incentive will be available only for one more quarter
  • between April 1, 2019 and September 30, 2019: maximum will be just 50% ($3,750)
  • between October 1,2019 to March 31, 2020: maximum will be just 25% ($1,875)
  • from April 1, 2020: no federal tax credit

General Motors cars:

More than 75% of all GM’s plug-in car sales fall on the Chevrolet Volt, which in November 2018 hit its new all-time record of 3,930! It would’ve been great news, but it was overshadowed by news that GM ends Volt production by March 2019, which is, by the way, the last month of the full $7,500 federal tax credit for GM.

Chevrolet Bolt EV struggles to note a sales increase this year, although November was its 2nd best month ever:

The federal tax credit was designed to jump-start the market of plug-in car sales and the main question is whether GM used the incentive in a way that will enable the company to gain a competitive advantage? Well, without copying the Volt powertrain to some popular SUV models over eight years and now ending the Volt, we feel GM failed to utilize its early start and position. Similarly, it happens also to Nissan, which needed years to make the LEAF more appealing from a design standpoint and still didn’t introduce the 60 kWh version (now it too is behind newcomers like Hyundai-Kia).

So far the winner seems to be Tesla – because it utilized the $7,500 in the ramp-up phase to the point when $7,500 will not be of that much importance (hopefully).

Paradoxically, hitting the limit should mean that GM will produce EVs at a higher scale now, because this is the only way to keep the price per unit low when there is no federal tax credit of up to $7,500.

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47 Comments on "GM Hits Federal Tax Credit Phase-Out Of 200,000 EVs Sold In U.S."

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Here’s what happens next: Bolt sales fall off the cliff.

Sad, but you’re right. Without attractive lease price, Bolt sales will be in the hundreds a month.

And GM doesn’t care.

And you know this how??

is leasing everything? How much is a Model 3 lease going for?

OR… GM has LG convert the Volts battery capacity for Bolts and makes and sells even more Bolts…

Regardless, they’d better drop the price on the Bolt for the sales to continue. Looking at GM’s stock price (and direction it’s headed), I’d say they don’t have a lot of wiggle room to be creative with pricing. Especially considering their hearts aren’t really into EV’s.

GM does not want to sell electric vehicles.

You talk with Mary personally?

GM, like any business, wants to be profitable and pay its investors.

Must be why they have sold the second most EVs in the US, and continue to have 2 cars in the highest monthly EVs sales outside of Tesla, and introduced several new models in China.

What happens next: price of the Bolt drops (or mfg incentives added, or more options included in MSRP) to keep Bolt price competitive. And sales remain somewhat stable.

I also fully expect GM to do an MCE for the Bolt EV for 2020 MY. Also there will likely be an increase in volume to international markets.

GM’s choice to concentrate on conquest sales, rather than focus on their own loyal customers, will be confirmed as a terrible decision for tax-credit use.

What suggestion is best for their next step, knowing that generous subsidy won’t be available?

You mean conquest sales like the Bolt? 75% of sales which are to people new to the brand?

Probably that’s why GM terminated Volt. What happens next to Bolt may be a big question.
Launch of $35,000 Model-3 could seriously alter the balance and the sales of Bolt.

GM needs to price the Bolt at $29k.

Tesla needs to price the Model 3 the same. What’s your point? Had you not heard the BEVs are expensive to produce?

Yeah, EV’s are especially unprofitable when you invest nothing in battery manufacturing capacity. Who woulda thunk it?

So where o’ where is that $29,000 BEV from Tesla? They should be able to easily sell one as they were so wise and invested in battery manufacturing capacity? Having your own factory means the batteries are practically free, right?

Truth stings.

That’s what they want you to believe and keep paying high prices.

Can already get top specc’d Bolt for $32k before incentives.

GM is terminating the Volt, becuase it shares a platform and a factory with the Cruze and other sedans that have had dropping sales figures and getting shut down so GM can refocus on BEVs in more popular market segments. The Volt is an unfortunate victim of collateral damage.

Well first GM is only closing one of the five factories that build the Cruze globally. The Cruze is GM’s number one selling vehicle globally (at ~750K units a year). Next the Volt and Cruze also share a platform with the Equinox which is Chevrolet’s second best selling vehicle in North America. Also in the USA the Volt is produced at DHAM (Detroit-Hamtramck), The Cruze was produced in Lordstown, OH (different factories). GM closed DHAM because it was an overflow factory for the Impala (sales in decline), Buick Lacrosse (never sold well) and for the Cadillac CT6 (a low volume car). And with their EV tax credit being slashed at the end of March that too would affect Volt volume. DHAM was only running at 30% capacity. This was simply another nail in the coffin for the facility.

Really sad, GM just doesn’t get it and their dealers are worse at getting it. Why no Voltec Equinox? Instead they threw a bone to their dealers with a diesel, the D in diesel is for dealer, parts service, twice the cost for oil changes etc. A Voltec in this would have been a sales leader. Instead hobble the car by making it too small for the market, like the Volt and Bolt. I lovey Volt but I’ve given up on the. GM since they are with the oil companies, they could dominate the PHEV market with CUV’s and Trucks. A Plug in Colorado / Silverado would sell out. They have all the parts. Now they just want to be a has been. Good by GM. I’ve bought many new cars from you!

“Well, without copying the Volt powertrain to some popular SUV models over eight years and now ending the Volt, we feel GM failed to utilize its early start and position.”

Not Really… the Volt was designed when batteries were 1,000 plus per KW and now they will be approaching 100 per KW in a year or two… A dual mode power train is simply to expensive and complex to compete with the simplicity of a BEV powertrain now that batteries are much much cheaper… KISS…

RIP PHEVs the newest LEGACY TECHNOLOGY…

kW is a unit of power, not energy. Batteries are not measured in kW.

KWh then 😉

If “Batteries are much much cheaper”, and “the simplicity of a BEV power train” has arrived, where are all the SUV/CUV BEVs sitting in Stealership showrooms, awaiting buyers?

The Toyota RAV 4 / Honda CRV / Nissan Rouge have yet to EVen barely adopt PHEV “LEGACY TECHNOLOGY”. The proclaimed END of legacy ICE PHEVs (SUVs&CUVs) still has not arrived, and is still a long way off.

and unfortunately so is the end of ICE but it is still legacy…

Do Not Read Between The Lines

It isn’t about now, it’s about what’s expected.
Forecasts are that batteries are going to be $100/kWh, and the Chinese/US/Quebec mandates are favoring long range BEV over PHEV.
So in the short term, it’s cheaper to build BEVs at a loss than PHEVs at a loss, and in the longer term the price gap between ICEV and long-range BEV will be under $6.5k, and shrinking for other reasons.
For a bunch of reasons, PHEV’s space is going to be squeezed hard.
Even in the US market, the majority of vehicles are crossovers, small cars and mid-size cars. The proportions are much larger elsewhere. So, globally the clear majority of light vehicles are going to be the easy ones, and the rest would get picked off gradually.

No, PHEVs are still incredibly useful, at least until 15 minute recharges are common as people still need to drive outside range of battery.

My Clarity PHEV will hit 30,000 miles before the end of the year, yet most of those (maybe 17,000) are electric only. Remember, the alternative was not a BEV, closest that would have worked was $15,000 more expensive and would have been some inconvenience charging on those long trips.

PHEV makes sense for a one car family.
I have the luxury of being a two car family. On long trips that we take several times a year, we drive more than 300 miles in a day and stopping for charging would be really inconvenient.

It is not untrue Just because you dont like it…
https://europe.autonews.com/sales-segment/plug-hybrids-hit-tougher-emissions-rules-end-subsidies

“Plug-in hybrids have always been a gamble for automakers because of the cost of fitting into a vehicle both a conventional engine and a battery pack big enough to provide satisfactory electric-only mileage.”

The gummint is going to have to do something about the current EV tax incentives. Fortunately we will have a Democratic controlled House to prevent the current program from just being cancelled outright. So they are left with a choice of incentivizng the purchase of the LEAF, i3, 500e and the new Korean offerings but not the two biggest domestic manufacturer choices. Let’s just hope that modification and extension of the current program isn’t tied to something asinine like border wall funding.

On other news, according to the bmwusa.com webpage, the 2019 i3 pricing has now been loaded and it looks like the prices stayed the same, even with the new 42 kWh battery. Just in case the M3 SR doesn’t come out until the incentives have dwindled down to nothing. Take the $46K for the i3, subtract dealer discount, $10K USAA incentive (which hopefully carries on), $2K owner loyalty, and the $7.5K tax credit and you are looking at mid $20’s for an i3. Just sayin’ . . . .

With President Unindicted Co-conspirator openly stating he will shut down the government earlier this week, his plan is to make the gov’t more dysfunctional, not less. Don’t plan on rationalism to magically insert itself into the issue, with rational legislation being the results.

I fully expect R’s to either kill the incentive before they lose the House at the end of the year as “Individual 1” threatened recently, or have “Individual 1” play off the loss of GM’s incentive as a punishment for GM closing plants (as if the incentives sunsetting for GM was somehow his idea.)

Don’t expect that D’s controlling roughly 55% of one half of the legislative branch to have miraculous results, while R’s still hold the majority in the other half of the legislative branch, plus top level control of the Executive and Judicial branches. Control over slightly more than one-half of one-half of one-third of the fed gov’t doesn’t lead to miracles.

Individual #1 has the best brain. His guts are smarter than most people’s brains. Trade wars are easy to win. Very legal. Very cool.

BMW i3 would have been a strong contender if it had 60kwh battery at $43000 price point.

And if it had 4 regular doors …

What? Even Cleveland Browns manage the clock better than this… Ridiculous.

Yeah, its almost like they don’t care.

GM has zero control over how many Bolts that dealerships sell once the vehicles are wholesaled by GM to the dealerships.

In fact, it would be illegal in many states for GM to even TRY to interfere in dealership’s sales numbers. Even intentionally artificially restricting wholesale deliveries in an attempt to manipulate dealership’s sales could be seen as a violation of some state Automobile Dealership Franchise laws.

I guess Trump’s threat to cut the tax incentives for GM’s electric cars wasn’t much of a threat, huh?

That was for his knowledge starved base…or maybe he didn’t know either…

Just 2,027 Volts (1 month inventory) and 3,381 Bolts (1.5 months inventory) are there.
This shows that GM is not trying to sell as much as possible in the holiday big sales month.
Have they started reducing production of Volts already.

GM will find another way to steal from the American taxpayer.

By the end of March 2019 you will only get the $7500 for another quarter? 😛

Does that mean $7500 + $3750 for April to June? 😉 Hehe…