GM Ends $7,500 EV Tax Credit, Unveils New Strategy

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GM Ends $7,500 EV Tax Credit, Unveils New Strategy

General Motors (GM) has decided to discontinue its plan to extend the $7,500 tax credit on electric vehicle (EV) leases. This change comes after the federal tax credit expired at the end of September 2023. Instead of extending the savings through leasing options, GM will now offer roughly $6,000 in savings directly from its budget for a limited period.

Details on GM’s Strategy Update

A spokesperson from GM confirmed the decision, stating that they had initially worked on an extended offer to benefit customers and dealers. However, after careful consideration, they opted not to utilize the tax credit. The new savings initiative will be available until the end of October 2023.

Market Context and Recent Sales Performance

In the third quarter of 2023, GM reported the delivery of over 66,500 electric vehicles, resulting in total sales of 144,668 EVs for the year. This figure represents a significant increase from the same period in 2022, more than doubling their sales. The Chevy Equinox EV has emerged as the top-selling non-Tesla EV in the U.S., while Cadillac holds the title for the leading luxury electric vehicle brand during this timeframe.

Comparative Strategies Among Automakers

Ford: Continuing to extend EV lease credits.
Stellantis: Also plans to maintain the tax credit for a few additional months.
BMW: Similar approach to extending benefits for EV leases.

This notable reversal by GM comes amid discussions led by Republican Senator Bernie Moren regarding ending the loophole that allowed the tax credit to be passed on through leasing.

Future of GM Electric Vehicles

Despite cutting back on the lease extension, GM remains committed to producing affordable electric vehicles. The Chevy Equinox EV is currently one of the most budget-friendly options in the U.S., priced below $35,000. Looking ahead, GM plans to introduce more low-cost electric models, such as the 2027 Chevy Bolt.

As the electric vehicle market continues to evolve, GM is focusing on strategies that will help them maintain and grow their market share in the coming years. Customers interested in exploring GM’s electric offerings, including the Chevy Equinox EV and Cadillac Escalade IQ, can visit El-Balad for more information.