General Motors Is Likely Next to Hit the Cap on the $7,500 EV Tax Credit

Illustration for article titled General Motors Is Likely Next to Hit the Cap on the $7,500 EV Tax Credit
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General Motors’ electric vehicle tax credit may soon run out, Fiat Chrysler’s new boss meets America’s boss, doubt over whether revised fuel economy standards will help workers—all this and more await you for The Morning Shift of Tuesday, Aug. 7, 2018.

1st Gear: Will This Hurt Bolt Sales?

Lo and behold, sales of the Chevrolet Bolt—General Motors’ first full-on electric vehicle of the modern era—have actually been pretty good. And like most EVs, those sales have no doubt been helped by the $7,500 federal electric car tax credit.


But that credit isn’t designed to last forever, and now like Tesla, GM seems poised to lose it once it’s sold its 200,000th EV or plug-in hybrid, something that will probably happen this year. From The Detroit News:

GM has sold about 186,670 Chevrolet Bolt and Spark EVs, Chevrolet Volt plug-in hybrids and Cadillac CT6 plug-in hybrids to date, according to analyst firm Edmunds. GM has said it expects to hit the 200,000 limit this year, but Edmunds says at the current selling rate, GM probably has until the first quarter of 2019.

The Detroit automaker likely will be the second automaker to reach the tax credit cap, after electric-car maker Tesla Inc. said last month it had delivered its 200,000th vehicle. That begins a phasing-out process of the $7,500 tax credit offered to buyers of full electric vehicles — reducing by half every six months until it hits zero.

“When you look at Tesla moving to end of rebates at end of July, it does bring to forefront the larger question of how these pioneers are going to be operating,” said Jeremy Acevedo, an automotive analyst with Edmunds. “One of the things GM is pretty clear about, though, is using this period as a springboard for the future they see on horizon. In that way, they have made inroads no other mainstream automakers have.”

So if you’re looking for a Bolt, now’s probably the time to get one. The car starts at $37,495 and can easily get into the $40,000 range with options—that’s all before the tax credit. It’s a way better deal if you can nail one down with the credit in place.

I’m actually driving one of them in New York this week and I’m enjoying it so far. I’ll let you know what I think in a full report next week.


2nd Gear: Manley Meets Trump

Former Jeep and Ram boss Mike Manley took the reins of Fiat Chrysler barely two weeks ago, replacing a then-ailing and now-deceased Sergio Marchionne. Now Manley’s off to the big show—namely one of President Trump’s golf courses in New Jersey for a meeting about the economy. You know, typical CEO shit. Via Bloomberg:

President Donald Trump will meet Tuesday with leaders from more than a dozen major companies, including Fiat Chrysler Automobiles’ new CEO Mike Manley and PepsiCo Inc.’s departing chief Indra Nooyi, as he shapes his economic message heading into midterm elections.

The executives are traveling to Trump’s golf resort in Bedminster, N.J., where he’s in the middle of what the White House calls a working vacation. The president will be joined by aides including his daughter Ivanka Trump and son-in-law Jared Kushner; Larry Kudlow, his top economic adviser; and deputy chief of staff for policy coordination Chris Liddell.

[...] Trump enjoys business leaders’ support for the tax law he signed last year and a deregulation agenda — policies his administration contends are fueling economic growth and low unemployment. But some CEOs have criticized his immigration policies and, especially, his trade war with China and U.S. allies.


Good luck, Mike. Hope you can end up the favorite now too.

3rd Gear: Revising CAFE May Not Help Workers

Speaking of the president, he insists that revising the Corporate Average Fuel Economy (CAFE) standards downward from the Obama-era heights will reinvigorate American manufacturing and cause more cars to be produced here. Maybe? But also not really, since it could hurt green tech investment? This, from Bloomberg:

“We’re going to work on the CAFE standards so you can make cars in America again,” he told auto workers in March 2017 outside of Detroit, referring to the corporate average fuel economy. “We’re going to help the companies, and they’re going to help you.”

But according to some experts — and even the agencies that last week recommended easing Obama-era fuel economy mandates — those workers may be less in-demand if the proposal takes effect.

Zoe Lipman, advanced transportation director from BlueGreen Alliance, a partnership between labor unions and environmental advocates, said that U.S. automakers have invested $63.8 billion in U.S. facilities and have promised another $12.4 billion through 2020 — much of it to meet the environmental dictates. At least 1,200 U.S. factories and engineering facilities in 48 states — and 288,000 American workers — are building parts and materials that boost fuel efficiency, according to the group.


Also, this:

Cars may be cheaper up front for consumers but they’ll use more fuel and cost more to operate under the easier standards, eating into consumer pocketbooks and hurting demand, she said. Longer term, walking away from higher fuel economy standards puts the U.S. at risk of losing high-value engineering work to China and Europe, which are marching ahead with tougher standards, she said.

“That’s really dangerous in terms of future competitiveness and making America great again,” said Helper.



4th Gear: Mustang Program Manager Out Over Inappropriate Behavior

Ford has parted ways with a second high-profile executive following the February dismissal of North America president Raj Nair. This time it’s Prakash Patel, global director of program management for the Ford Mustang. Via Automotive News:

Prakash Patel, Ford’s global director of program management and former lead product planner on the 50th anniversary Mustang, is no longer with the company, a Ford spokesman confirmed. The spokesman declined to comment further, citing a policy of not discussing “personnel matters.”

Patel was let go for acting inappropriately, a source with knowledge of the situation said, although the nature of the behavior remains unclear. Efforts to reach Patel for comment were unsuccessful.

Patel’s dismissal follows the February departure of Raj Nair, Ford’s president of North America, for behavior that Ford deemed “inconsistent with the company’s code of conduct.” Nair was Patel’s supervisor for a period of time.


It’s not clear what Patel is accused of doing. Last year Ford also came under fire for what’s been reported as widespread sexual misconduct at two Chicago plants.

5th Gear: Volvo’s Safety Tech May Have Prevented The Uber Crash

The Insurance Institute for Highway Safety has a new report that backs up what Jalopnik reported earlier this year: that the death of a pedestrian by an autonomous Uber test Volvo XC90 could well have been prevented if Uber hadn’t deactivated Volvo’s safety features. Via Bloomberg:

In a report Tuesday, the Insurance Institute for Highway Safety criticizes Uber for turning off Volvo’s collision-avoidance technology in the XC90 crossover that struck and killed a woman in Tempe on March 18. The insurer group’s chief research officer, David Zuby, vouched for the effectiveness of Volvo’s system, saying it would have prevented or mitigated the crash.

“I think it’s possible that, had the system been able to intervene, the fatality may not have occurred,” Zuby said in a phone interview. “I would argue that if developers of self-driving technology really intend to make our roads safer, they had better make sure they have the best crash-avoidance systems in place before they go out on the road.”

The fatality spurred Uber’s suspension of public road testing with its self-driving vehicles, and raised questions about both the safety of the company’s technology and its protocols with regards to use of human backup drivers. Police said in June that the woman behind the wheel in the Uber SUV was streaming the popular television show “The Voice” on her mobile phone in the moments before the crash.


Police in June said the test driver was streaming a TV show on her phone before fatally striking 49-year-old Elaine Herzberg. Uber has since suspended much of its self-driving car testing.

Reverse: Why, What Happened In Germany In 1944


Neutral: Are CAFE Standards Good For American Jobs?

Or will easing the fuel economy regs really spur more car production at home?

Editor-in-Chief at Jalopnik. 2002 Toyota 4Runner.

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Corporate Average Fuel Economy standards that high could only be met by selling electric cars no one wants at a loss, hence Marchionne’s plea for people not to buy his FIAT 500e because he lost $20,000 on each one. The Bolt sells for a loss, the Volt sells for a loss, Leaf sells for a loss, and that is with subsidies so what we are really talking about isn’t achieving higher fuel efficiency, but forcing car companies to make and sell cars at a loss. This is similar to the CAFE standards in the early nineties that crowded GM lots with unsold rebadged Toyotas while people drove away in unregulated SUVs, because trucks were different then under CAFE. Now we have SUVs as every soccer mom’s favorite personal transport apartment on wheels. Ridiculous regulation leads to unintended results. If the Obama era CAFE standards were left to stand I doubt sincerely we would have one iota of greater efficiency in vehicles. This is the market as it stands today. There are attempts to lower costs and create profitable EVs, but there is really no clear path towards that goal at this time.

Lots of tries to meet the standard, and really for what? So that we can displace emissions from a tail pipe to a smoke stack making electricity. If this all came with a push for more nuclear power then OK maybe you are lowering emissions, but otherwise this entire regulatory push is just an expensive ego project as far as I can see.

CAFE as a tool is not the most effective or focused way to regulate automobile efficiencies. Tailpipe emission standards, and higher gas taxes would work better to get the desired gains.