900 workers at GM Kansas City plant are laid off indefinitely
As the factory prepares to produce the new Chevrolet Volt, employees with the most seniority will be given an early opportunity to return.
General Motors Co GM.N is eliminating a program aimed at allowing dealers to continue receiving a $7,500 tax credit on electric vehicle leases for several months after federal subsidies expired on September 30, the company announced Wednesday.
Late last month, GM planned to have its in-house financing department begin purchasing EVs in dealer inventory. The company applied for a $7,500 federal credit for those vehicles and planned to roll that money into the terms of its EV leases to customers through the end of the year.
GM chose to cancel the program after Ohio Republican Sen. Bernie Moreno, a former auto dealer and active auto policy voice, expressed concerns about the program, people briefed on the matter told Reuters.
“After further consideration, we have decided not to claim the tax credit,” the company said in a statement to Reuters on Wednesday, without providing details on the reasons for the decision.
Moreno told Reuters in an interview that he was pleased with GM’s decision to eliminate the EV tax credit plan. “Even though the EV subsidy ended on September 30th, we are pleased that all car companies will comply with it,” he said. “We look forward to working with GM.” “We have introduced a number of policies to protect the domestic auto industry.”
The idea behind the program was to lessen the impact of expiring tax credits on dealers who fear they will be forced to part with hard-to-sell EVs. GM planned to apply for financing for tens of thousands of EVs in dealer inventory, according to people familiar with the plan.
Ford FN rolled out a similar program ahead of the tax credit expiration. It’s unclear whether Ford will continue that program. A spokesperson declined to comment.
GM planned to claim debt on about 20,000 EVs that are sitting on dealership lots or being shipped to stores, according to people familiar with the matter. The company’s finance arm, GM Financial, began making down payments on the cars ahead of the deadline for each vehicle to qualify for subsidies, the people said.
The company said in a statement Wednesday that it would “fund the incentive lease terms” through the end of October.
GM Financial’s down payment formula for these EV dealers was 5% of each car’s highest price. For example, GM Financial would have made a down payment of about $6,300 for two Chevrolet Blazer EVs, with a maximum price in the mid-$60,000 range, according to a term summary document provided by GM to dealers.
GM scrambled to put together the program days before the Sept. 30 tax credit deadline and explained the details in a Sept. 29 call with dealers, three people familiar with the matter said. Sources said GM officials were aware that Ford had a similar program in place for dealers.
Auto company executives, dealers and analysts said they expect EV sales to plummet as tax credits disappear. Electric vehicle sales rose to a record in September as consumers rushed to take advantage of subsidies.
Editing: Mike Collias, Mark Porter, Chris Reese, Margherita Choi, Nick Zieminski
