Published Date : Nov 29, 2018
General Motors announced a cost-efficient plan to avail tax credit, rendering the US president disappointed. The automotive company reported the closure of several manufacturing facilities and over 14,000 layoffs. The company has been witnessing a dip in their sales for the past few years. GM has thus decided to end two models of their cars and focus more on electric vehicle production.
GM to Win the Number Game by Year End
The government is offering a decent benefit and tax credits for consumers investing in electric vehicles. This is leading to consumers turning towards this option in order to avail tax credits. However, for an automaker, the federal law has a stipulation of the sale of over 200,000 eligible EVs. General Motors is anticipated to hit this target by the end of this year, while Tesla has already crossed it. This is expected to trigger the phasing out of this credit steadily for General Motors.
Is the Company Affected by President’s Tweets?
Donald Trump expressed his displeasure with GM’s decision over a tweet and is looking into cutting off their tax benefits. He also referred to the electric vehicle tax credit, and that he plans to curb the same. It is unclear as to how the President is going make good on his promise, as federal law does not single out vendors. Kristin Dziczek, VP at Center for Automotive Research, Ann Arbor, says that is will difficult for the President to pinpoint at GM and stop their funding.
However, after Trump’s statement, GM’s share fell by nearly 4% on Monday, November 26. GM, however, released a statement on Tuesday appreciating the U.S. administration. They mentioned that the layoffs will have an opportunity to work in other of the company’s plants.