GM Tries To Buy EV Customers
When several GM EVs were stripped of the $7,500 federal tax credit at the start of this year, America’s No.1 car company is offering potential customers an alternative and equal incentive. GM will give buyers of some of its EV models a $7,500 discount. Automotive Dive broke that story after reviewing a letter from GM to its dealers.
EV investing: Tesla is worth 16 times more than Ford.
GM’s desperate move results from the failure of its EV operations attempt to take market share from industry leader Tesla. GM is in that chase with almost every other major global car company. Almost all of Tesla’s cars qualify for the $7,500 tax credit program, which makes it even harder for many of its rivals to compete.
The federal tax credit, which can be as much as $7,500, is based on which models are assembled in North America. The government’s latest move reduced the number of vehicles that received credit from 43 to 19 at the start of the year. This program became more restrictive as the government eliminated credits on many vehicles with Chinese battery components.
GM plans to make supply chain and assembly location changes for several of its EVs so they can again be offered to buyers with the $7,500 credit reinstated. As Automotive Dive reports, “The move aims to help GM dealers sell EVs until more of its models are eligible for federal clean energy vehicle tax credits.”
GM made the $7,500 incentive decision as its efforts to compete in the EV sector have stalled. The Wall Street Journal recently described GM’s problem in an article titled “Mary Barra Spent a Decade Transforming GM. It Hasn’t Been Enough.” The author wrote, “Lately, Barra has said that not as many consumers have been willing to switch to electric as the company had expected, clouding the future payoff for her EV bet.” That, however, is not a strong argument. Tesla announced its annual production figures. The number rose 35% to 1.85 million. Tesla’s Chinese rival BYD also posted record production figures for 2023. The growth of EV sales is not the problem.
GM’s latest release of its sales figures underscores its EV challenges, making it clear why it cannot afford the loss of the government’s $7,500 credit. GM sold 2.6 million cars in the US in 2023 but only 75,883 EVs.
GM does not have an alternative. It has to pay potential consumers an incentive out of its own pocket.
