Electric

Tax Credit Cuts a Negative for the Electric Vehicle Market?

If tax incentives for electric vehicles (EVs) are taken away, companies such as Tesla and GM will struggle to meet their sales goals for these vehicles, according to research by Edmunds. The research is based on analysis of the Georgia market after expiration of their EV tax credit program.

“It will take a significant rise in gas prices or stricter government mandates to drive sales of EVs at high volume,” said Jessica Caldwell, executive director of industry analysis for Edmunds. “People want a car that makes their lives easier, and given the infrastructure challenges and battery limitations, right now EVs don’t do that.”

According to Edmunds, sales of all EVs increased in Georgia while the tax credit was available. Sales of the Nissan Leaf decreased sharply after expiration. Tesla Model S sales also decreased, but then quickly rebounded. Lease payments on EVs became much higher without the credits. For example, the Leaf’s average payment rose from $132 to $290. Forty one percent of EV buyers made over $150,000 a year.

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