Per Reuters, General Motors Company (GM - Free Report) sold 200,000 electric vehicles (EVs) in the United States by the end of 2018. With this, the auto giant reached the limit, which may lead to the phasing out of a $7,500 federal tax credit over the next 15 months. Notably, the 200,000 figure includes this automaker’s cumulative EV sales since 2010.
The federal tax credit is offered to lower the up-front costs of plug-in EVs. The manufacturer will be eligible for this tax credit up to 200,000 qualified EVs have been sold in the United States. Once that limit is reached, credit begins to phase out for the manufacturer. General Motors reached the limit in fourth-quarter 2018. This implies that in April the credit will decline to $3,750. Then, it will further decline to $1,875 in October for six months. By April 2020, the tax credit will disappear completely.
General Motors has been appealing for expanding the consumer tax credit for EVs as the company expanded production of the EV Bolt in response to consumer demand. In sync with its restructuring moves, this auto giant has been channelizing more resources to develop electric and self-driving vehicles.
General Motors has underperformed the industry it belongs to in the past six months. The company’s shares have declined 13.2% compared with 10.5% decrease recorded by the industry.
Currently, General Motors carries a Zacks Rank #2 (Buy).
A few other top-ranked stocks in the auto space are Advance Auto Parts, Inc. (AAP - Free Report) , Fox Factory Holding Corp. (FOXF - Free Report) and CarGurus, Inc. (CARG - Free Report) , each currently carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Advance Auto Parts has an expected long-term growth rate of 12.1%. Over the past year, shares of the company have increased 42.3%.
Fox Factory has an expected long-term growth rate of 17.9%. Over the past six months, shares of the company have risen 16.3%.
CarGurus has an expected long-term growth rate of 5%. Over the past year, shares of the company have rallied 9.6%.
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