GM: EVs won’t qualify for full tax credit and won’t meet production targets through 2024

If you’re looking for an electric vehicle next year, a GM model might not be as affordable (or accessible) as you thought.

General Motors, which makes three of the most affordable electric vehicles on the market, has confirmed(Opens in a new window) that its vehicles will only be eligible for the first half of the $7,500 ($3,750) federal tax credit in 2023.

Additionally, dealer stock may be more limited than expected. The company originally planned to manufacture 400,000 vehicles in 2023. During last week’s earnings call, however, CEO Mary Barra pushed that target to 2024, reports InsideEVs.(Opens in a new window). It’s unclear which models will be affected by this decision, although Barra said on the call that “all of our 2023 launches are progressing well.”

2022 Chevrolet Bolt EUV interior (GM)

Regarding the tax credit, Barra said: “We believe, from the outset, [vehicles purchased in 2023 are] will be eligible for the $3,750, and we will increase to have full qualification in the next two to three years, reaching $7,500. She refers to the two conditions an EV must meet for its owner to claim the credit when filing taxes:

  1. Minerals ($3,750)— 40% of the minerals inside the battery, such as lithium or cobalt, must come from the United States or a free trade partner in North America. The percentage increases in subsequent years.

  2. Assembly ($3,750)—The car receives the second half of the $3,750 credit if 50% of the battery components are assembled in North America. It also increases over time.

Consumers may lose these credits in the short term, as fewer vehicles will meet the requirements until more infrastructure is built.

The Biden administration says the demands put the country on track to more quickly achieve longer-term goals, such as domestic job creation and reduced reliance on China, which produces up to to 90% of the world’s batteries.

On October 19, President Biden announced $2.8 billion in funding to support domestic battery manufacturing. Funding will be split between mines, like Idaho’s new cobalt operation(Opens in a new window)and battery manufacturing plants. The latter has so far been driven by automakers themselves, with many foreign and domestic brands opening new factories in the United States.

All of GM’s newest electric vehicles will use its proprietary Ultium battery, as well as existing Hummer EVs and Cadillac Lyriqs. The Chevy Bolt EV and EUV use an older platform, which will be phased out as the more sophisticated Ultium takes center stage.

Gloved hand holding a gray rectangular pouch.

The Ultium Battery Platform features a series of pockets that can be flexibly arranged under the car. (Credit: GM)

In 2022, sales of GM’s sub-$30,000 Chevy Bolt EVs and EUVs skyrocketed. The Hummer EV and Cadillac Lyriq also sold out for all of 2023.

Next year, GM plans to launch a top-of-the-line $30,000 Chevrolet Equinox EV. In 2024, it will have two new battery-powered additions with the Chevy Blazer and Silverado electric vehicles. The automaker plans to make “electric vehicles for everyone” and fully electrify its lineup by 2035.

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