GM Rolls Out $7,500 Incentive on EVs Disqualified for Tax Credit

Jan 08, 2024 03:03 AM EST

BLUE CHEVROLET SPORTS CAR PARKED ON THE ROAD NEAR CITY BUILDINGS — (Photo : PEXELS/Khalid Satvilker)

General Motors is ensuring the competitiveness of its new electric vehicles amidst recent U.S. Treasury regulations disqualifying certain models from the $7,500 consumer tax credit this year. According to reports, these laws limit tax credit eligibility for vehicles with components from China, Iran, North Korea, or Russia. These criteria complicate EV qualification.

Incentive from GM: $7,500 on EVs Disqualified for Tax Credit

In response, General Motors announced incentives of $7,500 for its electric vehicles affected by the recent loss of the U.S. government tax credit. Meanwhile, Ford Motor (F.N) disclosed plans to raise prices by $10,000 for select F-150 EV models, as per Reuters reports.

December saw the Treasury unveiling guidelines mandating revised battery sourcing requirements, aiming to steer the U.S. EV supply chain away from Chinese sources. These restrictions transformed the industry this week. GM is offering, $7,500 on affected electric vehicles to mitigate the tax credit loss and preserve price competitiveness.

Ford's F-150 EV price modification reflects tax credit changes. Moreover, last month, GM announced that its EVs, except the Chevrolet Bolt, would be temporarily ineligible due to specific components. The Cadillac Lyriq and Chevy Blazer EVs are among those affected.

Similarly, Ford revealed that its E-Transit and Mach-E would lose the $3,750 tax credit, while the F-150 EV Lightning and Lincoln Corsair Grand Touring SUV maintained their eligibility for credits.

Meanwhile, on Wednesday, Ford announced a $5,000 to $10,000 hike in the cost of its entry-level F-150 EVs while reducing prices for select premium models by as much as $7,000.

In October, Ford temporarily reduced production at the plant responsible for manufacturing the F-150 Lightning EV. Then, in December, the automaker informed suppliers of its intention to start producing approximately 1,600 electric F-150 Lightning EV trucks per week from January onward, a notable decrease from the initial plan of 3,200 per week.

How to Avail the $7,500 Incentive

GM informed its dealers that it would compensate with an equivalent EV tax credit purchase sum for any vehicles rendered ineligible under the updated guidelines.

Anticipating a sourcing adjustment, GM projects that the Lyriq and Blazer EVs will requalify for eligibility by early 2024. Additionally, GM stated that the Chevrolet Equinox EV, Chevrolet Silverado EV, GMC Sierra EV, and Cadillac OPTIQ produced following the sourcing alteration would qualify for the complete incentive.

Electrek reported that the announcement arrives as more limitations were imposed on which electric vehicles can qualify. EVs using battery components from a "foreign entity of concern," such as China, became ineligible starting January 1st. As a result of these adjustments, only 13 electric vehicles meet the criteria for the credit in 2024.

Among the models that are no longer eligible are the Tesla Model 3 RWD and LR, Volkswagen ID.4, Ford Mustang Mach-E, and Nissan LEAF.

Additionally, Tesla has confirmed that all versions of the Model Y will still be eligible for the complete ,500 tax credit. These updates enable individuals to claim the credit right at the time of purchase (at participating dealerships) instead of having to wait and claim it through their tax return.