Business Corpus: GM Joins Tesla In Reaching This Key Threshold For Electric Car SalesGM sold its 200,000th electric car in the U.S., joining Tesla in reaching the key number at which federal tax credits for electric cars starts to go away. The post GM Joins Tesla In Reaching This Key Threshold For Electric Car Sales appeared first on Investor's Business Daily.

[Collection]

General Motors (GM) reportedly has sold 200,000 electric cars, joining Tesla (TSLA) in hitting the critical number at which the federal electric vehicle (EV) tax credit starts to go away.

That threshold on cumulative sales of electric cars came in the fourth quarter of 2018, triggering a phaseout of the $7,500 federal tax credit over the next 15 months, sources told Reuters. Tesla hit the 200,000 mark in July.

GM will see the tax credit halve in April, and halve again to $1,875 in October, before ending in April next year.

The reduction comes as GM and other automakers massively boost investments in electric cars. GM plans to eventually go all-electric, ditching gas- and diesel-powered cars, as does Volkswagen (VWAGY).

GM stock rose 0.6% on the stock market today but remains stuck under the 10-week moving average. Tesla stock dived 6.8% Tuesday after the company announced a price cut for its electric cars and weaker-than-expected Q4 deliveries. Meanwhile Fiat Chrysler (FCAU) lost 0.9%, and Ford Motor (F) rose 3.3%.

Tax Credits Key To Sales Of Electric Cars

For Tesla, the federal EV tax credit was halved from $7,500 to $3,750 as of Jan. 1. The automaker said Tuesday it's taking steps to "partially absorb the reduction" by slashing Tesla Model S, Model X and Model 3 prices by $2,000 in the U.S.

Federal and state tax credits are seen as critical to EV sales.

Since 2010, buyers of qualified EVs have been eligible to receive a credit against federal tax owed of up to $7,500. This tax credit begins to phase out once a company has sold 200,000 such vehicles. That reflects the reality that the tax credit benefits electric vehicle makers via higher sales.

MIGHT BE INTERESTED IN:

Want More IBD Videos? Subscribe To Our YouTube Channel

How To Make Electric Cars Profitable As Tesla, GM Look To Build Millions

Stocks To Buy And Watch: Top IPOs, Big And Small Caps, Growth Stocks

Electric Scooter Investment Stampede Tries To Outrun Sidewalk Rage

The post GM Joins Tesla In Reaching This Key Threshold For Electric Car Sales appeared first on Investor's Business Daily.