Last year, General Motors (NYSE: GM) became the second company after Tesla (NASDAQ: TSLA) to touch the threshold of electric vehicle sales in the US, which triggers a gradual phase-out of the federal tax credit.
Starting Monday, the federal tax credit on the Chevrolet Bolt EV will be slashed from $7,500 to $3,750 as it has hit a sales figure of 200,000. And unlike rival Tesla, General Motors on Thursday confirmed that it would not slash the sticker price on Bolt EV to balance off the price increase caused by the credit cut.
In January this year, Tesla had reduced the prices of Model S, Model X and Model 3 vehicles in the US by $2,000 to take the cost burden off its customers.
GM spokesperson Jim Cain told Reuters, “It is easier to react to the market by working with dealers and your marketing team than it is to change sticker prices.”
The report is hardly surprising given that the Detroit-based automaker is slowly replacing Chevy with Cadillac as its flagship brand for electric vehicles. This comes on the heels of the lackluster performance of Chevy Bolt, sales of which fell by over 20% year-over-year in 2018.
In November, General Motors said it would plug the production of Chevy’s hybrid model Volt by March 2019, as part of its strategy to cut down manufacturing of low-selling brands.
The change in strategy makes sense, as the automaker is currently trailing behind its rivals in the electric vehicle segment. GM is yet to have a compelling competitor to Tesla Model S, or for that matter, any other high-end EV manufactured by global peers including BMW, Jaguar, Mercedes or Audi.
However, GM is aggressively pursuing its EV ambitions and hopes to bring out at least 20 different modes in the next four years.