General Motors' Offer: Auto Behemoth Reportedly Steps Up With $7,500 Incentives On Tax Credit Losing EVs
Portfolio Pulse from Nabaparna Bhattacharya
General Motors Company (NYSE:GM) is offering a $7,500 incentive on certain electric vehicles (EVs) that no longer qualify for a U.S. government tax credit due to new guidelines. GM expects the Lyriq and Blazer EV to regain eligibility in early 2024 after a sourcing adjustment. Other models like the Chevrolet Equinox EV, Chevrolet Silverado EV, GMC Sierra EV, and Cadillac OPTIQ will also be eligible for the full incentive post-sourcing change. The Inflation Reduction Act of 2022 requires North American assembly for EV tax credit eligibility, which has reduced the number of qualifying EV models from 43 to 19. GM shares dropped by 2.43% to $35.17.
January 03, 2024 | 5:20 pm
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General Motors is compensating for the loss of a government EV tax credit by offering a $7,500 incentive on affected models. The company is adjusting sourcing to regain eligibility for the credit in 2024 for models like the Lyriq and Blazer EV, and for future models such as the Chevrolet Equinox EV, Chevrolet Silverado EV, GMC Sierra EV, and Cadillac OPTIQ.
The incentive offered by GM could help sustain sales of its EVs in the short term, mitigating the impact of losing the tax credit. However, the stock price has already reacted negatively, likely due to concerns about the loss of the tax credit affecting demand. The company's proactive measures to adjust sourcing and regain eligibility may stabilize investor confidence over time.
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