Federal tax credit on GM plug-in hybrid and EV models drops by half on Monday

2019 Chevrlet Bolt EV (Photo: GM Media)

DETROIT-- Are you interested in buying a Chevrolet Bolt EV electric car? Do you want the maximum tax credit for your purchase? If you answered 'yes,' go to your nearest Chevy dealer today and finalized your deal!

On Monday, April 1, 2019, the maximum tax credit the Internal Revenue Service will allow on those and other General Motors plug-in hybrid electric models drops from $7,500 to $3,750. The credit will decrease again on October 1 to $1,875 and on January 1, 2020, it goes away.

The phase down was triggered late last year when GM sold its 200,000th qualifying plug-in electric drive vehicle. The countdown started on January 1, 2010.

RELATED LINK: See Internal Revenue Service chart of General Motors plug-in electric drive vehicles qualified for tax credit

Since most, if not all, car dealerships are closed on Sundays, today is your last chance to buy a qualifying vehicle and receive the full tax credit.

RELATED LINK: Auto journalist Doug DeMuro explains why you can't buy a car on Sundays

Considering how much the Bolt EV costs-- the base price is $37,495 including destination charge-- the tax credit has been a significant benefit to both GM and the consumer since the federal government has, in effect, subsidized the purchases allowing the manufacturer to sell more models and the customer to get a break on the high price for a relatively small, nondescript vehicle. With the tax credit phasing, there is concern that the already limited market for plug-in electric vehicles will dry up.

Since its introduction in December 2016, sales for the Bolt EV in the United States totaled 41,895 through the end of 2018, peaking at 23,297 in 2017 and dropping to 18,019 last year according to GM figures tracked by the GM Authority blog. Because GM reports its U.S. sales figures quarterly, number for year-to-date 2019 are not available yet.

On Thursday, GM spokesman Jim Cain confirmed to Reuters that the company has no plans to cut the sticker price on the Bolt EV when the federal tax credit drops on Monday. "It is easier to react to the market by working with dealers and your marketing team than it is to change sticker prices," said Cain.

Reuters reports GM will offer new incentives next week. Cain said GM currently offers 14-percent off the price of a Bolt EV.