Expiring Tax Cut Could Prove Disastrous To Mainstream EVs

The electric vehicle market is heating up thanks to new entries such as the Chevrolet Bolt which boasts an impressive range of 238 miles per charge.

However, there could be trouble on the horizon as the several automakers are getting close to the 200,000 vehicle limit which qualifies eco-friendly models for a $7,500 federal tax credit.

According to Edmunds report seen by Bloomberg, the elimination of the tax credit could wipe out between 12-37% percent of the electric vehicle market in the United States. To back up its theory, Edmunds points to Georgia which became a hotbed of electric vehicle activity thanks to a state credit of $5,000.

Once the credit expired, sales of mass market electric vehicles such as the Nissan Leaf cratered. Higher-end vehicles like the Tesla Model S were unaffected and sales of Tesla vehicles are higher today than when the state subsidy was in place.

The news is especially troubling for General Motors and Nissan as both manufacturers are expected to sell their 200,000th electric vehicle sometime after Tesla achieves that accomplishment next year. Speculation suggests the tax credit is unlikely to be renewed under the Trump administration so models such as the Bolt would retail for the full $37,495 starting price instead of the much more attractive price of $29,995 after incentives.

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  • pcurve

    “Once the credit expired, sales of mass market electric vehicles such as the Nissan Leaf cratered.”

    I think credit is still available for Leaf… the sales cratered probably because nissan stopped offering dirt cheap no money down leases, nissan didn’t offer meaningful improvement and novelty wore off.

  • RobSez

    IF the EV credits are allowed to expire as designed under the current program, there should be little impact on EV sales. There has been a steep public learning curve on EVs and very little effort to educate prospective EV owners. I believe if anything, the anti-EV crowd has worked harder to disseminate misinformation than all other education efforts combined. Fortunately, there are now enough EVs on the road and EV drivers willing to share their experiences to spark general public curiosity. A growing number of individuals are now making an effort to educate themselves about​ EVs. EV sales & leasing, the preferred way to drive electric, will follow. Assuming the end of credits are naturally reached through growth, sales should reach a self sustainable critical mass. However, killing the American EV industry in its infancy requires ending EV tax credits ASAP. Personally, I think Big Oil, and it’s anti-EV minions will win this round. Thankfully, U.S. auto sales are only 20%-25% of the market. The rest of the world will go on without U.S.

  • Michael_66589

    Tax credit system is pure socialism (bad thing) – let market (costomers) if they like EVs or not. If they will like it – they will buy it even without these kind of donation.

    • Dominator

      In a level playing field, sure, but here’s the thing, the fossil fuel industry is subsidized as well as fossil fuel vehicles. This bit of information is not normally mentioned. You’re right about one thing, although you did not explicitly state it but implied it, was that you’re not going to win anyone over by touting the advantages over fossil fueled vehicles. But, make the EVs better than the fossil fuel alternatives and then it’s game on. Tesla (Musk) knew that out of the gate. His cars had to be both different and better than the dino powered alternatives. It worked. As he keeps pushing solutions like self sustained power at home (solar panels and batteries) and the electric super highway, the advantages of owning an EV become better and better. Battery tech is soaring. High speed recharge is on its way as well as safe battery tech. EVs are so efficient that it takes nothing to increase the power of the vehicles. ICEs are at their limit now. Heck, they need electric “boost” motors to compete with the instantaneous of an EV. As computing power is on an exponential accession so is EV tech. Fossil fueled vehicles are in their sunset phase. They will, at least around the world, be seen as socially unacceptable. In the UK and Europe everyone has been buying < 1.5L diesels because of the cost of fuel and engine sized taxation. EVs eschew that and you can have the power you want. Just waiting for the selection to come. And it will with a vengeance.

      • gary4205

        No the fossil fuel industry isn’t “subsidized” !

        Aren’t you left wingers capable of critical thought?