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GM likely next to hit EV tax credit cap

Better scoop up that Bolt EV if you think you qualify for the full $7,500.

A Bolt EV leaves the line in Lake Orion, Michigan, where it's built on the same assembly line as the Sonic.

Andrew Krok/Roadshow

Tesla was the first automaker to hit the cap on the federal electric-vehicle tax credit, but GM apparently isn't too far behind.

General Motors should reach 200,000 electrified vehicle sales this year, triggering a phase-out of its federal tax credit, The Detroit News reports. It has sold approximately 187,000 plug-in hybrids and EVs to date, split between the Chevrolet Bolt EV electric hatch and Volt extended-range electric, as well as the Cadillac CT6 plug-in hybrid. GM believes it will hit the cap this year, but The Detroit News talked to Edmunds, which believes it won't trigger the phase-out until the first quarter of 2019.

When an automaker hits that 200,000-car mark, buyers will see their potential tax credit halved every six months for a year, when it will disappear entirely. It's worth noting that this isn't a point-of-sale price reduction, but rather a one-for-one reduction of your tax liability for the year. If you didn't pay $7,500 in federal taxes, you won't be getting that full amount, even if you snag up an EV before the phase-out begins.

As The Detroit News notes, it's taken quite some time for this 2009 tax credit to get to the point of phasing out. It was implemented to help spur EV and plug-in adoption rates, but the technology for long-range electric vehicles didn't really reach the mass market until now -- the 238-mile Bolt EV starts at about $38,000 before any credits, which is only a couple grand above the average new-car transaction price. Other EVs, like the Nissan Leaf, have been available for longer, but with sub-200-mile ranges and still-limited infrastructure, many buyers are still wary about going electric.

A number of automakers, including Infiniti and Volvo, have committed to offering electrified variants of entire lineups starting in the next few years, so it shouldn't be too long before other automakers start approaching the tax-credit cap, as well.