Thursday , April 15 2021

GM is struggling to keep Trump's electricity tax

General Motors is struggling to keep a valuable tax credit on electric vehicles, as the largest American automaker tries to cope with the political downturn caused by its plans to launch several North American factories and spill thousands of workers.

Retaining $ 7,500 in tax incentives for buyers is crucial for GM as the company turns from internal combustion engines to build cars powered by batteries or hydrogen fuel cells. However, the release and closure of factories may endanger the GM in order to maintain incentives. This helps make plugins, such as the Chevy Bolt, worth $ 36,000, more affordable at a time when competition from other electric vehicle manufacturers is heated.

AHEM. faces opposition from US President Donald Trump and other Republicans who consider the loan as futile with taxpayers' money and want to eliminate it. Trump, who promised a revival of production in the Midwest, angrily reacted to GM's announcement of a "transformation" at the end of last month, stating that his administration "is looking at reducing all subsidies on GM, including electric vehicles."

The story continues below the ad

The company is already on the verge of phasing out the tax credit program unless the Congress makes a change to the law that limits the break of 200,000 cars per manufacturer. Without incentives, GM may be forced to lower the cost of its electric vehicles, so that potential customers could not take their business elsewhere, according to automotive industry experts.

As evidence of the importance of a loan for the future of GM, the automaker expanded its lobbyist trail in Washington and even joined forces with two rivals, Tesla and Nissan, to call for the lifting of the limit of 200,000 vehicles.

On the way, Republican Senator John Barrasso of Wyoming, chairman of the Senate Committee on the Environment and Public Works. Mr Barrasso introduced a tax abolitionist law in October, which, according to him, would save about $ 20 billion over the next 10 years. He argued that the electric vehicle market has already been set up and "no longer needs to rely on state aid."

"The idea of ​​subsidies should be to try to make sure that electric vehicles are a viable technology," said Barrasso. "Well, that's obviously there."

A tax credit came at a private meeting between Wednesday's senators from Ohio, Republican Rob Portman, and Democrat Sherrod Brown and GM's chief executive officer, Mary Barr, reports the congressman who is familiar with the conversation. As part of the restructuring, GM said that it would not do the Chevy Cruze in its Landstown, Ohio, factory until March and plans to close the plant forever.

Mr. Portman told Ms. Barry that it's hard to help with such priorities as electric car loan when GM moves products from Ohio, according to an assistant who was not authorized to publicly discuss a private conversation and advocated anonymity.

One of the lobbyists who is working on GM's salvage loan is Kent Hence, a former Chancellor of the Texas University of Texas who is well-trained in the GOP circles, according to his online profile. Hence recounts his role as a fundraising campaign for the outgoing speaker of the House of Paul Ryan, Senate Senate leader Mitch McConnell, leader of most of Kevin McCarthy's house, and others. He has been familiar with America's energy secretary and former Texas governor Texas Rick Perry for about 30 years.

The story continues below the ad

GM in the beginning of August called the former Trump White House officer, Everett Eisenstat, his senior vice president for global public policy, a post that controls lobbying the company. However, Mr. Eisenstad is not registered as a lobbyist, according to disclosure reports submitted to Congress. Before joining the GM, he was Deputy Assistant to Trump on International Economic Affairs.

According to the federal law, a $ 7,500 loan for buyers is gradually phased out after the manufacturer sells 200,000 qualified electric vehicles. GM has estimated that it has reached this rate by the end of December, as well as Bolt will face new and potentially rigid competition.

Sam Abulzamid, a senior analyst at Navigant Research, said Hyundai and Kia will be selling compact SUVs to the US early next year, which can travel over 385 kilometers per battery, approximately the same as Bolt. Ford will launch a series of new hybrid plug-in models in 2019, including Lincoln Aviator, Explorer and Escape.

"With increasing market distances from cars to auxiliary vehicles, all this is expected to be more popular than Bolt," said Mr Abulzamid. In order to remain competitive against new entries, GM is likely to have to be cut [retail price] Bolt, as well as any additional electric cars that they launch next year due to the corresponding reduction of tax breaks, "- he said.

Carl Brower, executive publisher of Autotrader and Kelley Blue Book, said the loan was "extremely important" for electric vehicle manufacturers. According to him, the reduction of vehicle down-stream costs typically plays a significant role in sales, he said, referring to polls in which more consumers would buy electric cars if these cars were affordable.

GM has joined forces with Tesla and Nissan, as well as several groups of consumers and others to further expand lobbying. The coalition, EV Drive, launched in November, urged legislators to include in the open letter last week a bill on government spending on the passage of an order, which led to the loss of 200,000 cars.

The story continues below the ad

"Reducing the coefficient for each manufacturer will improve the gaming field for all EV manufacturers and stimulate innovation among domestic manufacturers, providing America's leadership in the hyper-competitive world car market," the coalition said.

Jeannine Ginivan, GM spokesman, said that the tax credit should be changed, but refused to say whether the automaker supported a certain law that would remove the restrictions.

"We believe that an important part of reaching the zero emission levels of the future and the establishment of the United States as an electrification leader is the continuation of a federal tax credit to help make electric vehicles more accessible to all customers," Ms. Jinwan said in an e-mail.

In addition to its own GM lobbyists, four lobbyists from Hance Scarborough, Austin, Tex, founded in 1994 by Mr. Hens, operate on behalf of GM, including Mr. Hans, according to disclosure information.

GM has also contracted with two other lobbying companies this year to focus on electric and automatic vehicles: Polaris-Hutton Group and DS2 Group. The fourth firm, the S-3 group, was hired by the GM in 2014, and added tax credit in its portfolio of lobbying problems earlier this year.

Source link