GM Expected To Lose Its $7,500 EV Federal Tax Credit In Early 2019

General Motors is expected to lose the $7500 electric vehicle tax credit in the near future; more specifically, in the first quarter of 2019.

According to Edmunds, the automaker has sold approximately 186,670 examples of the Chevrolet Bolt, Spark, Chevrolet Volt, and Cadillac CT6 plug-in hybrid. As soon as this figure exceeds 200,000, the tax credit will no longer be available.

GM claims that it will probably hit this 200,000 mark before the end of the year, but Edmunds believes the company has until the first quarter of next year. Either way, General Motors will soon become the second automaker after Tesla to reach the tax credit cap.

When 200,000 electrified vehicles are sold by a manufacturer, the tax credit is reduced by half every six months until it reaches zero.

Speaking with The Detroit News, automotive analyst Jeremy Acevedo said GM is in a strong position to still sell EVs once this incentive has been removed.

“When you look at Tesla moving to end of rebates at end of July, it does bring to forefront the larger question of how these pioneers are going to be operating.

“One of the things GM is pretty clear about, though, is using this period as a springboard for the future they see on horizon. In that way, they have made inroads no other mainstream automakers have,” Acevedo said.

The federal electric vehicle tax credit was adopted by the Obama administration in 2009, when reasonably-priced EVs were just starting to become mainstream. In the nine years since, the number of electric vehicles on offer has skyrocketed and consumers are now spoiled for choice.

While GM is selling EVs in impressive numbers, there is some concern among analysts that the company won’t have it as easy as Tesla once the tax credit has vanished.

“Chevrolet will probably have a more difficult time than Tesla because Tesla is already an expensive brand,” IHS Markit automotive analyst Stephanie Brinley said. “Chevrolet’s products are at lower price-point where consumers are more sensitive to that increase.”