Want to buy one of GM’s electric cars? Better act fast. The Obama administration created the tax break — known officially as the “Plug-In Electric Drive Vehicle Credit” — in 2008 to both spur automakers to go electric and induce consumers to switch to greener cars, which tend to be pricier.

The tax credit for new qualified plug-in electric drive motor vehicles sold by General Motors began to phase out April 1st, 2019. The credit was designed to begin to phase out in the second calendar quarter after the calendar quarter in which a manufacturer has sold at least 200,000 qualified vehicles for use or lease in the United States.

GM’s cumulative sales of qualified vehicles reached the 200,000-vehicle threshold in the quarter ending December 31, 2018.

Phase-Out

The reduced credit schedule applies to any make, model, or model year of new qualified plug-in electric drive motor vehicle that is sold by General Motors, LLC and purchased for use or lease in the U.S. on or after April 1, 2019. Thus, a qualifying GM vehicle is eligible for:

• the 100-percent credit ($7,500) if it is acquired before April 1, 2019;
• the 50-percent credit ($3,750) if it is acquired after March 31, 2019, and before October 1, 2019; or
• the 25-percent credit ($1,875) if it is acquired after September 30, 2019, and before April 1, 2020.

After March 31, 2020, GM vehicles will not be eligible for any plug-in electric drive vehicle credit.

GM Vehicles Affected

The phase out of the plug-in electric vehicle credit applies to the Chevrolet Volt, Spark EV, and Bolt, and to the Cadillac ELR and CT6 Plug-In.

The tax subsidy for Tesla, which reached the 200,000 vehicle limit last summer, started to wind down in October of 2018 and is now $3,750 per car. Tesla slashed the price of three models by $2,000 to help offset partial loss of the tax credit.

To claim the credit, fill out IRS Form 8936, Qualified Plug-in Electric Drive Motor Vehicle Credit. For vehicles acquired for personal use, report the credit from Form 8936 on the appropriate line of your Form 1040, U.S. Individual Income Tax Return. For vehicles purchased in 2010 or later, this credit can be used toward the alternative minimum tax (AMT).  To learn more about the law, visit the IRS’s Plug-in Electric Drive Vehicle Credit webpage.