Home News GM refuses Tesla’s tax credit strategy, will adopt dealer-based ‘incentives’ instead

GM refuses Tesla’s tax credit strategy, will adopt dealer-based ‘incentives’ instead

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GM refuses Tesla’s tax credit strategy, will adopt dealer-based ‘incentives’ instead

General Motors (GM) has become the second vehicle manufacturer to sell 200,000 electric cars, triggering a phaseout period for the $7,500 federal tax credit for electric vehicle buyers. To address the tax GM has chosen to favor new, non-specified “incentives” to keep its electric vehicles aggressive.

“It is easier to react to the marketplace by working with traders and your marketing staff than it is to change sticker prices,” GM spokesman Jim Cain commented on the issue, also noting that GM is “sensitive to worth ” in the electric vehicle industry.

GM’s reaction to the phaseout period of the $7,500 stands in stark contrast to that of Tesla. When the electric vehicle maker reached the 200,000 threshold July, the company made its prospective buyers aware of the effect the tax credit phase out would have on their vehicle rates. The prices of its vehicles were promptly adjusted to buffer some of the growth brought about by the reduced federal tax credit, which was halved to $3,750. As could be seen in GM’s statement, it looks like the experienced American carmaker isn’t prepared to show this type of flexibility just. 

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Under the tax credit system for vehicles, buyers must wait until their annual taxes are complete before receiving the incentive. A new federal bill, dubbed the Electric CARS Act of 2018, was proposed last year to both extend the full $7,500 charge until 2028 regardless of the number of vehicles sold.

Under the bill car buyers would get an immediate discount off. The bill is now still being considered by the Ways and Means Committee. In California, a $2,500 local subsidy has backing from lawmakers to increase its amount to $4,500, a move intended to buffer the effect of a federal credit.

Tesla exhibits its electric cars and energy products at the 2018 LA Auto Show. [Credit: Christian Prenzler/Teslarati]

Tesla’s introduction of the $35,000 Model 3 Standard Range has ushered in a new consumer market for the California-based company focused on affordability, as planned. Absorption of external costs regarded as a move aimed at keeping clients happy while reverses that were manufacturing and delivery delays hindered buyers’ ability to take advantage of the tax credit.

Before the Model 3 Standard Range launch, large auto manufacturers like GM made the only affordable electric vehicle choices. Tesla’s aggressive pricing angle makes GM’s “incentive” strategy interesting now that the hybrid Chevy Volt has stopped production after a 23% reduction in sales last year. GM is also ramping up production and sales efforts for the Chevy Bolt and has pledged to launch another 20 electric car models by 2023.

The post GM refuses Tesla’s tax credit strategy, will embrace dealer-based ‘incentives’ instead appeared initially on TESLARATI.

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