America's Biggest Automaker Makes A Tactical Error


Feuding politicians are making life hard for GM.

Since its inception in 2008, the federal tax credits for electric vehicles have been controversial. As the allocated amount to each manufacturer starts running out, a political fight has begun, and GM has found itself at the center. Currently, the federal tax credit provides up to $7,500 to EV buyers on the first 200,000 qualified EVs sold in the United States by each manufacturer.

GM and Tesla both went over the 200,000 mark in 2018, but haven't been phased out entirely yet. Both companies are pushing Congress to raise the 200,000 ceilings, but, according to Detroit News, GM has hit a large snag.

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A Senate aide has told Detroit News that "some Democratic members are unhappy about GM's decision to intervene in a lawsuit between California and the federal government to argue in favor of the Trump administration's position that Washington should create one set of gas mileage rules for all the nation's cars."

On the one hand, that's understandable as it brings into question if the tax credit is worth pursuing if GM is siding with Trump on fuel-economy standards. On the other, it's removing the financial incentive some people will need to drive cars that don't generate any emissions.

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Jeannine Ginivan, a spokeswoman for GM, said in a statement that "the EV tax credit provides customers with a proven incentive as we work to establish the US as a leader in electrification, helping make electric vehicles more affordable for all customers. Modifying the tax credit will allow all customers to continue to receive the full benefit and provide them with a greater choice of vehicles."

Of course, the fact GM isn't able to offer that to all its customers looking at cars like the Chevrolet Bolt hurts its competitiveness in EV sales. Playing both sides of the aisle is a dangerous game, and it will be interesting to see if the Democrats in Congress will remember the larger issue at hand.

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