Last week, President Trump directed his anger at General Motors for its decision to idle five plants in North America. At the time, he also threatened to “cut all GM subsidies including those for electric vehicles.”
The administration appears to be moving forward with its plan as Bloomberg reports Trump’s chief economic adviser, Larry Kudlow, told reporters that electric vehicle tax credits will “end in the near future.” Kudlow went on to say this could happen in 2020 or 2021 as Trump wants to “end those subsidies and others of the Obama administration.”
While it’s clear that the President wants to eliminate the tax credit, he would likely need congressional support to end the incentives as they were passed by Congress. This could prove to be an uphill battle as the Democrats will be in control of the House next year and some Republicans are in favor extending the credit.
….for electric cars. General Motors made a big China bet years ago when they built plants there (and in Mexico) – don’t think that bet is going to pay off. I am here to protect America’s Workers!
— Donald J. Trump (@realDonaldTrump) November 27, 2018
Despite being billed as a punishment for General Motors, it wouldn’t have much effect on the automaker. As we reported last week, the company is quickly approaching the sale of its 200,000th eligible vehicle and this will trigger a reduction in incentives before they’re finally phased out.
Tesla hit the magic number back in July and that means customers who take delivery of new models in January will only receive a credit of $3,750. Six months later, in July of 2019, the rebate will only be worth $1,875.
Instead of punishing GM, the elimination of tax credits would hurt a number of companies who are planning to launch electric vehicles in the near future. This includes models such as the Audi E-Tron and Mercedes EQC.
