Get Ready to Say Goodbye to GM's $7,500 Electric Car Tax Credit

The 2018 Chevrolet Bolt EV.
The 2018 Chevrolet Bolt EV.
Image: Chevrolet
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Saying farewell to tax credits for certain electric vehicles in the United States, Carlos Ghosn’s jail time, record EV sales in Norway and payment extensions for people affected by the U.S. government shutdown. All of this and more in The Morning Shift for Thursday, Jan. 3, 2019.


1st Gear: General Motors’ EV Tax Credit Is Reportedly on the Way Out

The United States offers $7,500 tax credits to new-car buyers who choose to go electric, but the good times don’t last forever: As we saw with Tesla recently, only the buyers who get in early get to take advantage of the lower prices.

Reuters reports that an unnamed source briefed on the matter said this week that General Motors hit the magic number that begins the phase out of the tax credit, which is 200,000 vehicles sold in the country. The person said GM hit the number in the fourth quarter of 2018, meaning the tax credit will drop to $3,750 in April, $1,875 in October, and will be gone by April of 2020. This is one of the few times when it isn’t advantageous to be late to the party.

Here’s some more on GM and Tesla’s credits, from Reuters:

The tax credit is aimed at defraying the cost of electric vehicles that are more expensive than similarly sized internal combustion engine vehicles. In 2009, Congress set the phase-out threshold at 200,000 vehicles per manufacturer.

GM and Tesla Inc (TSLA.O), which hit the 200,000 figure in July 2018, have both lobbied Congress to lift the cap or extend the existing tax credit. Tesla’s EV tax credit fell to $3,750 on Tuesday and Tesla said it was cutting prices on its EVs by $2,000 to partially offset the lower tax credit.

In March, GM Chief Executive Mary Barra called on Congress to expand the consumer tax credit for electric vehicles as the company boosted production of the EV Bolt in response to consumer demand. She repeated the request last month during a visit to Capitol Hill.

Reuters reports that part of GM’s huge restructuring in November, which cost plants and thousands of jobs, was doubling resources for developing EVs and autonomous cars. In response to the dropping of its tax credit to $3,750, Tesla dropped the prices of all of its cars by $2,000 this week.

2nd Gear: Carlos Ghosn Gets an Extra 10 Days in Tokyo Detention Center

Former Nissan chairperson Carlos Ghosn is still under arrest for his alleged financial misconduct, in case you were wondering. In fact, Reuters reports that his stay in the Tokyo Detention Center just got extended by 10 days.


Ghosn has been arrested and re-arrested since the first bust in late November, for allegations like underreporting his income and shifting trades between personal accounts and those belonging to Nissan. Alliance partners Nissan and Mitsubishi kicked him out as a chairman, but fellow partner Renault kept him as chairman and CEO despite everything. The Nissan-Renault relationship isn’t doing so well lately, as you might have picked up on.

The recent extension for Ghosn’s stay at the Tokyo Detention Center happened on Monday, Reuters reports, when the Tokyo District Court ruled that Ghosn should stay in the detention center until Jan. 11 this time. He’s been there since the first arrest on Nov. 19.


Here’s some of what’s going on in Ghosn’s world, according to Reuters:

Since then, he has been re-arrested twice over the latest allegations and on claims that he underreported his Nissan salary for a prolonged period. He denies the allegations. [...]

The decision to extend Ghosn’s time in detention comes a day before his 10-day detention period for the latest allegation was set to expire on Tuesday, and follows the release of former Nissan executive Greg Kelly on bail last week after a court ruled against extending his detention while he awaits trial. [...]

Ghosn’s arrest has also put Japan’s criminal justice system under international scrutiny and sparked criticism for some of its practices, including keeping suspects in detention for long periods and prohibiting defense lawyers from being present during interrogations, which can last eight hours a day.


Reuters reports that calls to Ghosn’s lawyer, Motonari Otsuru, on Monday, an unofficial holiday in Japan, weren’t answered. A Nissan spokesperson told the outlet that the company wasn’t able to comment on the news, but said Nissan’s “own investigation is ongoing, and its scope continues to broaden.”

3rd Gear: General Motors Becomes Mexico’s Top Automaker

General Motors sales might be on a downturn in the U.S. with a 2.7-percent drop in the fourth quarter of 2018 and a drop of 1.6 percent across the whole year, but the Detroit Free Press reports that the company just took the title of top automaker in Mexico from Nissan.


The Freep reports that GM and Nissan have been at the top as far as production in Mexico for years, and that recent production changes resulted in the two swapping the top spots. GM slashed jobs and closed plants in the U.S. in order to “invest in the future” in November, while focusing on retooling its Mexico plants in recent years for SUV and pickup production. Nissan, instead, has been scaling back its sedan production in Mexico, dropping it from the top spot.

From the Freep:

GM said its boost in production is to meet the strong demand for SUV and pickups, as sedans have fallen out of buyers’ favor. [...]

In Mexico, GM and Nissan have been the top two automakers for decades and have “alternated positions depending on what has happened in their production levels,” said Stephanie Brinley, principal analyst at IHS Markit.

While there has been a shift in some of GM’s production plans, said Brinley, “This is more on Nissan pulling back production.”


The differences in pay are huge between the U.S. and Mexico, with the Freep also reporting these recent and semi-recent stats:

Over the last few years, GM has created or shifted production to Mexico, including the Chevrolet Equinox and GMC Terrain SUVs and Chevrolet Silverado pickups, said UAW President Gary Jones.

In 2016, GM paid hourly workers in its Mexico plants about $1.90 an hour, according to a white paper by Alex Covarrubias, a professor at the University of Sonora in Northern Mexico. The current UAW contract pays GM hourly workers a start rate of $17 an hour and increases to about $28 an hour over an eight-year period, said a UAW spokesman.

Closing Detroit-Hamtramck, Lordstown, Oshawa and two transmission plants puts more than 6,200 jobs at stake. GM also plans to cut close to 8,000 salaried jobs this month. GM said it would save $6 billion by the end of 2020 with these moves.


The Freep has much more on the story here.

4th Gear: Norway Hits Record EV Sales in 2018

Norway set a world record when the New Year rolled around, thanks to its electric-vehicle sales in 2018—Reuters reports that almost a third of all new-car sales last year in Norway, which wants to end sales of fossil-fuel vehicles as a country by 2025, were pure electric vehicles.


There are a lot of incentives to buying battery-powered cars in Norway, Reuters reports, like exemptions from most taxes, free parking and free charging spots. That led EV sales to skyrocket in recent years, going from 5.5 percent of new cars in 2013 to 20.8 percent in 2017, and, last year, 31.2 percent.

Here’s how Norway compares to other parts of the world, according to Reuters:

The sales figures consolidate Norway’s global lead in electric car sales per capita, part of an attempt by Western Europe’s biggest producer of oil and gas to transform to a greener economy.

The International Energy Agency (IEA), using a slightly different yardstick for electric vehicles that includes hybrids that can be plugged in, showed Norway’s share of such cars at 39 percent in 2017, far ahead of second-placed Iceland on 12 percent and Sweden on six percent.

By contrast, such electric cars had a 2.2 percent share in China in 2017 and 1.2 percent in the United States, IEA data show.


Even still, Reuters reports that head of the Norwegian Road Federation, Oeyvind Solberg Thorsen, told a recent conference that the EV sales record was “a small step closer to the 2025 goal.” He said the country has a long way to go before then, since two-thirds of the 148,000 cars sold in Norway last year were either hybrids or powered by fossil fuels.

5th Gear: Toyota, Lexus Offer Payment Extensions for Those Impacted by Government Shutdown


Many U.S. national parks are a nightmare with the government shutdown, along with all of the other negatives this kind of event brings. But Toyota and Lexus announced on Wednesday that people with cars leased or financed through their agencies who are affected by the government shutdown could get some financial relief on their car payments while all of this is going on.

There are catches, of course. The ability to get deferred or extended payments is for Toyota Financial Services or Lexus Financial Services customers, and the two automakers said those affected by the shutdown, in their definition, include “furloughed workers, businesses and employees of businesses directly affected by the shutdown, government contractors, and suppliers.”


The announcement said lease or finance customers in good standing with their accounts can get up to two months of finance-contract payment extensions or lease deferred payments, and that interested customers should contact either Lexus or Toyota Financial services.

Reverse: The Word ‘Automobile’ First Appears in the New York Times

The word “automobile” first appeared in the New York Times on Jan. 3, 1899, in an editorial about why other words used for the “automobile” at the time, like “autotruck” and “autowain” were weird and bad. (Some records have it as Jan. 3 of that year, others have it as Jan. 2.)


No matter how much disdain the Times had for “autotruck” on this day all of those years ago, it’s a pretty sweet word. Somebody put it on a shirt.

Neutral: Is It Harder for You to Buy a Vehicle Knowing You Missed Out on a Bigger Tax Credit?


Imagine, for a second, that you’re going to buy a new electric vehicle from a dealer rather than an old rust bucket that you found on Craigslist. Would missing out on the tax credit, by however much, break the deal for you?

Staff writer, Jalopnik



The price/tax credit thing isn’t the biggest issue with EV’s. The inconvenience of recharging is what prevents them from being used as much more than a commuter car. 

My little Yaris works as an efficient commuter car AND a cross country cruiser. With little planning, I can point my little car in any direction and drive. Every 400 miles, I pull into a gas station and “fully recharge it” in 5 minutes and take off again.