President Trump on Tuesday threatened to end General Motors’s federal tax credit for electric vehicles in retaliation for the company’s planned layoffs.
Trump tweeted that he is “very disappointed” with the company’s plans to close up to five manufacturing plants — four of them in the United States, one in Canada — and lay off about 15 percent of its workforce.
“We are now looking at cutting all @GM subsidies, including … for electric cars,” he wrote.
{mosads}GM’s share price fell on the New York Stock Exchange in the minutes after Trump’s tweet, reaching as low as 3.8 percent below Monday’s closing price.
In a statement on Tuesday afternoon, the automaker said it appreciates “the actions this administration has taken on behalf of industry to improve the overall competitiveness of U.S. manufacturing” and that “many of the U.S. workers impacted” by Monday’s layoff announcement “will have the opportunity to shift to other GM plants.”
“GM is committed to maintaining a strong manufacturing presence in the U.S., as evidenced by our more than $22 billion investments in U.S. operations since 2009. Yesterday’s announcements support our ability to invest for future growth and position the company for long-term success and maintain and grow American jobs,” the company said.
Trump has blasted GM and its CEO, Mary Barra, since the Monday morning layoff announcements and has pledged to take action to prevent the job losses.
It’s unclear what other subsidies might be targeted by Trump, whether he would focus only on GM or end the tax credit altogether. Ending the subsidy would require Congress to pass a new law.
The federal government provides a $7,500 tax break to U.S. consumers who buy electric vehicles. Two GM vehicles qualify for the incentive: the all-electric Chevrolet Bolt and the plug-in hybrid Chevrolet Volt.
Larry Kudlow, Trump’s top economic adviser, on Tuesday also mentioned potentially targeting the electric vehicle credit.
“We are going to be looking at certain subsidies regarding electric cars and others, whether they should apply or not. I can’t say anything final about that, but we’re looking into it,” Kudlow told reporters in a White House briefing before Trump’s tweet.
“Again, that reflects the president’s own disappointment regarding these actions,” he said of the plant closings.
As of the third quarter of 2018, GM was less than 4,000 vehicles away from hitting the point at which federal tax credits start to phase out. The phase-out starts when a manufacturer sells 200,000 electric cars.
GM and other automakers are lobbying Congress to lift the 200,000-vehicle limit. Bills in both the House and Senate have been introduced but neither chamber has passed one of the measures.
Support for the tax credit generally falls along party lines, with Democrats in strong support and Republicans opposed. Nonetheless, Sen. Dean Heller (R-Nev.), who lost his reelection fight earlier this month, is the lead sponsor on one bill to lift the cap on the credit.
—Brett Samuels contributed. Updated 4:09 p.m.