Some GM, Ford Models Will Lose EV Incentives While Some Buick And Ford Dealers Refuse To Sell Electric Cars – CleanTechnica

It’s gotten so we need a digital assistant to keep up with all that’s happening in the world of electric cars here at the end of 2023. New Treasury Department regulations go into effect on January 1, 2024 that tighten the rules for battery materials and components. As a result, several electric cars that are eligible for federal incentives today won’t be eligible once the ball drops at midnight in Times Square a few days from now.

“Treasury proposed strict rules disqualifying all EVs with certain foreign battery content including low-value components, which effectively means most EVs will not be eligible beginning on January 1. After reviewing Treasury’s long-awaited proposed guidance, we believe the Cadillac LYRIQ and Chevrolet Blazer EV will temporarily lose eligibility for the clean vehicle credit on Jan. 1, 2024 because of two minor components,” GM spokesperson Liz Winter said in a statement that was reported by the Detroit News. “While we await final rules, GM has pulled ahead sourcing plans for qualifying components in early 2024 and will advocate for our dealers and customers who purchase vehicles built ahead of the new guidance.”

The components at issue for GM are separators and electrolytes. Chevrolet Bolt EVs and EUVs will remain eligible for the credit. The GMC Hummer EV truck and SUV were not eligible because of their higher price. Nothing commercial, including the Chevrolet Silverado EV Work Truck, will lose the incentive.

“GM is quickly transitioning so all remaining GM EVs under the MSRP cap will be eligible for the full incentive in early 2024, including the Cadillac Lyriq and Optiq, Chevrolet Blazer EV, Equinox EV, Silverado EV, and GMC Sierra EV,” Winter said.

In a letter to dealers, John Roth, vice president of Cadillac, and Scott Bell, vice president of Chevrolet said: “We are committed to the future of EVs and will have the sales and marketing support to sell these ineligible vehicles. Beginning in January, GM will provide the equivalent EV tax credit purchase amount for any vehicles that became ineligible due to the new guidelines.” Beginning January 1, 2024, the EV tax credit becomes a rebate that will be applied directly to the purchase price by the dealer.

At Ford, three vehicles still will be eligible for the tax credits in 2024 when their MSRP is at or below $80,000 and the purchaser meets the law’s income limits. The Ford F-150 Lightning qualifies for the full $7,500, while the Escape and Lincoln Corsair Grand Touring plug-in hybrids are eligible for the $3,750 amount. Ford said its E-Transit won’t be eligible for the $3,750 tax credit beginning on January1, 2024. The Mustang Mach-E and Lincoln Aviator Grand Touring plug-in hybrid will both lose their existing $3,500 credit as well.

Stellantis expects no changes for its available plug-in hybrids. The Chrysler Pacifica Hybrid minivan qualifies for the full $7,500 credit. The Jeep Wrangler and Grand Cherokee 4xe SUVs qualify for up to $3,750 on a purchase. Tesla’s Model 3 RWD and Long Range cars will lose eligibility for the tax credits on January 1, 2024, according to the company. The Performance versions of the Model 3 and Model Y both continue to be eligible for the full $7500 tax credit/rebate so far as we know. The most accurate pricing information is always to be found on the Tesla website.

Buick & Ford Dealers Get Cold Feet Over Electric Cars

While all this backing and filling is going on over federal incentives, franchise dealers for Ford and Buick are telling the companies to take their electric cars and shove them — metaphorically speaking of course. The manufacturers are requiring their dealers to make major upgrades to their infrastructure in order to sell electric cars.

Some of that is for specialized training and tools. If you read our story about the Chevy Blazer EV bought by Edmunds that has been in the shop at a local dealer for two weeks with no end in sight, you will appreciate that servicing EVs is not much like servicing a conventional car. Much of the new investment required is for installing Level 3 chargers, which the dealers claim will cost them hundreds of thousands of dollars. That claim seems bogus to us. It is highly unlikely Tesla is paying that kind of money to install Supercharger equipment, but the dealers are scared they will not be able to recoup their investment and are overstating the amount they will need to spend in order to gain sympathy for their plight.

According to the Detroit Free Press, half the Ford dealers in the US — some 1,550 in all — have chosen to stick with selling hybrid and internal combustion engine vehicles only in 2024, waiting to decide whether to make the investments needed to sell and service electric vehicles.

“EV adoption rates vary across the country and we believe our dealers know their market best,” Ford spokesman Marty Gunsberg said. “As Ford dealers have completed their own local market assessments, enrollments for 2024 are just over 50% of the network, placing 86% of the population within 20 miles of a Ford dealership that can sell and service a Ford EV.” A year ago, the Free Press reported that Ford CEO Jim Farley had “secured commitments” from 2 out of every 3 dealers to go all-in on selling EVs.

Ford has since reduced the number of charging stations required per dealership, lowering dealer investments. Ford said installation costs vary by dealer site. The company declined to provide additional details on which dealerships would move ahead with EV investment, but the company indicated that dealerships in EV-friendly states such as California are moving forward while places including the Dakotas are slower to plunge into the EV commitment.

Automotive News reports about half of Buick dealers have also decided they want no part of the EV revolution. In 2022, General Motors gave Buick dealers across the nation a simple choice — invest a significant amount of money to prepare for EVs or opt for a buyout. Over a year later, the brand has reportedly lost nearly half of its dealerships as the roll out of the first Buick electric cars approaches.

It says the number of Buick dealers in the United States dropped by about 47% during 2023 from 1,958 stores at the beginning of the year to around 1,000 today. The cost of upgrading infrastructure at each dealership is around $300,000 to $400,000 according to informed estimates.

Yet the Buick division does not seem unhappy about losing that many dealers. “I’m really pleased with where we are. The network, where we are now, is a good size. It’s with dealers who are focused on the business, who’ve shown that they can recover the volume that the dealers who transitioned away were doing,” company boss Duncan Aldred said.

According to Automotive News, the dealers who chose to stop selling Buick models accounted for about 20% of the brand’s sales in the United States. Buick told the publication that around 89% of the American population still lives within 25 miles of one of its dealerships.

The Takeaway

The confusion over federal tax credits will not help sales of electric cars in the US. Prospective buyers hate uncertainty, but that situation will resolve itself in time.

The dealers who are turning their backs on electric cars seem to be very short sighted. They are like electronics stores refusing to carry flat screen TVs or smartphones. It’s likely they will look back in a few years and realize how blind they were to the opportunity presented by electric cars. Or maybe we here at CleanTechnica are just wearing rose colored glasses and will look like idiots when EV sales collapse in a few years. If it were up to us, our money would be on electric cars. In our opinion, by 2030 cars with infernal combustion engines will be a curiosity — at best.