General Motors (GM) has reversed its decision to pursue a scheme that would have enabled its dealers to offer a $7,500 tax credit on leases of electric vehicles (EVs).
The move after the scheduled end of the federal subsidy on 30 September, reported Reuters, citing sources.
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According to sources, the reversal follows concerns raised by Ohio’s Republican Senator Bernie Moreno, who has a background in car dealership and is involved in automotive policy discussions.
GM initially proposed a plan in which its financing division, GM Financial, would purchase EVs from dealer inventories to qualify for the federal tax credit.
The credit would then be incorporated into lease agreements for customers until the end of the year.
However, “after further consideration, we have decided not to claim the tax credit,” GM told the news agency, without providing further details.
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By GlobalDataSenator Moreno expressed in an interview with Reuters that “he was happy with GM’s decision to scrap the EV tax-credit plan.”
Moreno said: “I look forward to working with GM. We’re putting a lot of policies in place to protect our domestic auto industry.”
The programme was designed to mitigate the impact of the tax credit’s expiration on dealers, who feared difficulty in selling EVs without the incentive.
Sources said that GM had intended to claim the credit on approximately 20,000 EVs that were either in dealership lots or en route to stores.
GM Financial had even started making down payments on these vehicles prior to the deadline to secure the subsidy for each car, sourced added.
The news agency said that down payments made by GM Financial to dealers for the EVs were calculated at 5% of each vehicle’s maximum price.
The plan was hastily assembled just days before the tax credit was set to expire, with GM outlining the details to dealers on a call on 29 September.
Last month, GM announced that it would be scaling back production at one of its key EV manufacturing plants, a move attributed to reduced federal support for EVs during the tenure of former US President Donald Trump.
