General Motors will reportedly offer an incentive of $7,500 on some electric vehicles (EVs). The move comes just three days after a scheduled change to federal rules that resulted in many EVs losing access to a $7,500 federal tax credit.
Reuters reports that GM has told dealerships it will provide the credit “for any vehicles that became ineligible due to the new guidelines.”
That would include the Chevrolet Blazer EV, Equinox EV, and Silverado EV; and the Cadillac Lyriq. The Chevrolet Bolt EV and Bolt EUV are still eligible for the government’s discount.
How the Rules Changed
The federal tax rebate program offers incentives to vehicles that meet certain manufacturing requirements. Those requirements grow stricter each year until 2028, with the increase always coming Jan. 1.
Last year, the rules required automakers to build at least 50% of an EV’s battery in North America. This year, that requirement jumped to 60%.
Last year’s rules also required automakers to obtain at least 40% of the minerals used in batteries from the U.S. or certain trade partners. That requirement increased to 50% on Jan. 1.
Because of the change, the list of qualifying models dropped from 43 to 19.
Related: Here Are the (Few) EVs That Still Qualify for Tax Credits
GM Working To Requalify
But automakers don’t have to wait for next year to qualify again. They can, at any time, buy minerals from new suppliers or move production to qualify again.
That’s GM’s plan. Spokesperson Liz Winter told the Detroit News, “GM has pulled ahead sourcing plans for qualifying components in early 2024.”
Buyers Can Use Credit as Down Payment
While the list of qualifying cars is shorter, buyers gained a big advantage on Jan. 1, too. Another rule change allows buyers to use the tax credit as a down payment rather than waiting to claim it on their taxes.
That drives the effective price of qualifying cars down immediately. Chevrolet has stopped building both Bolts, but dealers still have thousands on sales lots. With the help of the federal down payment, the Bolt EV now effectively starts under $20,000 for most buyers.
