AUTO

GM Providing $7,500 Discounts for EVs That Lost Tax Incentives

January 22, 2024

The Blazer EV, Silverado EV, and Cadillac Lyriq lost tax incentive eligibility due to battery components sourced from foreign countries of concern, affecting GM EV discounts.
The new tax incentive requirements are pushing EV manufacturers from batteries manufactured in China, North Korea, Russia, and Iran.
GM is changing its battery sourcing, so many ineligible EVs should become eligible later this year.

As the number of EVs qualifying for 2024 Inflation Reduction Act tax incentives drops, General Motors (GM) instructs dealerships to provide EV discounts for all electric vehicle models. This price drop comes in contrast to EV price changes from Ford and other automakers.

Fewer EVs Qualify for Point-of-Sale Tax Incentives

According to the IRA, the number of 2024 EVs qualifying for tax incentives dropped significantly compared to 2023 models. In 2023, 43 vehicles earned tax incentives. Currently, 19 vehicles qualify for GM EV discounts and tax incentives. Many EVs lost their tax incentive status thanks to new battery sourcing requirements. Shoppers who choose these vehicles will receive the tax credit at the point of sale.

2025 GMC Sierra EV Elevation: Entry-Level Electric Pickup — _{2025 GMC Sierra EV (Image courtesy of GMC)}

In 2022 and 2023, tax credits were given to EVs assembled in the United States. Electric vehicles sold in 2024 will not qualify for tax incentives if the battery components are manufactured or assembled in a foreign country of concern. Therefore, if electric vehicles have battery components made in China, the EV will not qualify for tax incentives. Other foreign entities of concern include Russia, North Korea, and Iran.

GM Giving Discounts Expecting New Battery Sourcing

The changes affected many EVs from legacy automakers like General Motors, Ford, Nissan, and Volkswagen. General Motors is taking steps to change its battery sourcing, and the automaker has created a stop-gap to keep incentivizing drivers to purchase the Chevy Blazer EV and Cadillac Lyriq.

Image showcasing the 2024 Cadillac Lyriq — _{2024 Cadillac Lyriq (Image courtesy of Cadillac)}

In lieu of the current ineligibility, the automaker is giving drivers a $7,500 discount at the point of purchase. GM will provide dealerships with the EV tax credit “for any vehicles that became ineligible due to the new guidelines.” GM is confident the Blazer EV and Lyriq will regain eligibility after the automaker weans itself from Chinese batteries.

Tax Incentives on Upcoming 2024 General Motors EVs

General Motors expects the upcoming 2024 EVs like the Chevrolet Equinox EV, Silverado EV, GMC Sierra EV, and Cadillac Optiq will also qualify for the GM EV discounts and tax incentive when they arrive on dealership lots. The battery sourcing change should give these vehicles the full $7,500 tax credit. The Chevrolet Bolt has retained its tax incentive eligibility.

Image showcasing Chevy Silverado at 2023 LA Auto Show — _{2024 Chevrolet Silverado EV (Image courtesy of Neil Tjin)}

Other EVs that lost EV tax incentives include the Nissan Leaf, the Volkswagen ID.4, and the Ford Mach-E. Most Tesla and Rivian models still qualify for tax incentives.