The electric vehicle market is heating up thanks to new entries such as the Chevrolet Bolt which boasts an impressive range of 238 miles per charge.
However, there could be trouble on the horizon as the several automakers are getting close to the 200,000 vehicle limit which qualifies eco-friendly models for a $7,500 federal tax credit.
According to Edmunds report seen by Bloomberg, the elimination of the tax credit could wipe out between 12-37% percent of the electric vehicle market in the United States. To back up its theory, Edmunds points to Georgia which became a hotbed of electric vehicle activity thanks to a state credit of $5,000.
Once the credit expired, sales of mass market electric vehicles such as the Nissan Leaf cratered. Higher-end vehicles like the Tesla Model S were unaffected and sales of Tesla vehicles are higher today than when the state subsidy was in place.
The news is especially troubling for General Motors and Nissan as both manufacturers are expected to sell their 200,000th electric vehicle sometime after Tesla achieves that accomplishment next year. Speculation suggests the tax credit is unlikely to be renewed under the Trump administration so models such as the Bolt would retail for the full $37,495 starting price instead of the much more attractive price of $29,995 after incentives.
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