Mar 31, 2023
GM Sees Edge in EV Market From New US Tax Credit Rules
(Bloomberg) -- General Motors Co. expects most electric vehicles made using its Ultium battery to be eligible for US tax credits, giving it an edge over competitors whose vehicles may no longer qualify for the benefit.
Car buyers can get up to a $7,500 tax credit if they purchase a battery powered model subject to certain criteria outlined Friday by the Treasury Department as part of the Biden administration’s Inflation Reduction Act. GM said it will have several EVs in production by the end of the year for which it is confident the full credit can be claimed.
“This is a strategy that we have been executing for some time now that’s very well aligned with the goals of the US government’s recently passed policies to accelerate EV production and adoption,” spokesperson Matt Ybarra said in a statement.
Other automakers have suggested the new guidance will limit the number of vehicles that qualify for incentives once the new guidance goes into effect on April 18. EV market leader Tesla Inc. said it expects the rules will cut the amount of tax credits that can be claimed for the rear-wheel drive version of its popular Model 3. Ford Motor Co. said it will help buyers determine eligibility for tax credits on its EV models, without providing specifics.
GM’s electric models are assembled in the US with its Ultium-branded batteries that are — or soon will be — made in Lordstown, Ohio, and Spring Hill, Tennessee. That should allow most of them to clear the more stringent criteria adopted by the federal government, the spokesman said.
The automaker also expects to benefit from mining deals it has signed in the past two years to secure raw materials meeting tougher rules on sourcing. It has taken equity stakes in some of these ventures to guarantee future supplies of key materials for its batteries.
GM currently sells one EV expected to qualify for the full credit — the Cadillac Lyriq SUV model. Three others will join the mix later this year. Electric versions of its Chevrolet Blazer mid-sized SUV will go into production by June and a Chevy Equinox compact SUV will be added to its EV lineup this fall. Fleet customers for its upcoming Chevy Silverado pickup will also be in line for a $7,500 incentive under rules for commercial buyers, GM said.
It expects buyers of its subcompact Bolt models to be able to able to claim a partial credit. But the Hummer pickup and SUV won’t qualify because both exceed a $80,000 sticker price maximum.
--With assistance from Keith Laing.
(Updates with comment from GM spokesperson in third paragraph; An earlier version of this story corrected the number of models GM sees eleigible for a full tax credit.)
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