GM EVs Will Qualify For Full $7,500 Tax Credit In 2-3 Years: CEO
General Motors CEO Mary Barra is confident the automaker’s electric vehicles will qualify for the full $7,500 federal tax credit in two to three years.
According to Bloomberg, Barra told Wall Street analysts during General Motors Q3 2022 earnings call last week that the carmaker will be able to meet all battery sourcing and manufacturing requirements in two to three years to get the $7,500 federal tax credit.
To be eligible for the full credit under the Inflation Reduction Act passed in August, electric vehicles must be assembled in North America and contain batteries made from raw materials sourced from North America or countries that have free-trade agreements with the United States.
“We think, out of the gate, we’re going to be eligible for the $3,750, and we’ll ramp to have full qualification in the next two to three years, getting up to the $7,500. It just takes a couple of years to ramp up based on our expectations with the supply moves that we’ve already made.”
Mary Barra, General Motors CEO
Gallery: 2024 Chevrolet Equinox EV
The executive added that GM’s commercial EV fleet built by BrightDrop will also have an important contribution when it comes to federal incentives. The Inflation Reduction Act introduces a federal tax credit of up to $7,500 for commercial EVs weighing less than 14,000 pounds (6,350 kilograms).
The incentive will be available to city governments and other fleet operators, with no restrictions on battery sourcing or manufacturing—as opposed to passenger EVs, which are subject to a series of conditions.
Just like Ford, General Motors believes that there’s a “significant opportunity” to benefit from the EV tax credit of up to $45 per kilowatt-hour thanks to battery cell and module production in the United States. GM is currently building four battery cell plants in the US through its Ultium Cells joint venture with LG Energy. The first one began production earlier this year in Ohio, with the automaker planning to inaugurate one each year.
Barra also said that GM has been working on battery materials and supply contracts to meet a previously announced goal of reaching 1 million units of annual EV capacity in North America in 2025.
Many automakers have criticized the battery sourcing provisions in the Inflation Reduction Act and asked the US Treasury for leeway, arguing that securing the battery materials will take time.
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