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"Not much punch" behind Trump's threat of interrupting EV contributions to GM, says expert

[ad_1] Staff with files from Richard Madan

Published Tuesday 27 November 2018 21:58 EST

Last Updated Tuesday, November 27, 2018 10:04 AM EST

US President Donald Trump threatened to lower an electric vehicle contribution to General Motors on Tuesday over planned construction shutdowns, but an industry expert said it would have little impact on the company.

The threatening closures, which include four American plants and one in Oshawa, Ont., Expect to cost 14,000 US jobs and another 2,900 employees in Canada.

Trump, who committed to a promise to take back manufacturing jobs and won key Rust Belt States in the 2016 presidential election, wrote on twitter that "we are now looking at cutting all GM contributions, even for electric cars."

Jeremy Acevedo, a car industry analyst with Edmunds in Santa Monica, California, told CTV News that GM would barely notice a subsidy deduction for electric vehicles.

"It may be a threat, but not much stop behind it," he said.

The EV subsidy is a tax of $ 7,500 for consumers who buy electric cars.

"The way leasing goes and it's so popular here now, there are many opportunities for GM and retailers to actually absorb these tax credits and pass on cheap leasing to customers out there," said Acevedo.

The credit – cross-sectoral – is discontinued after a company sells 200,000 electric cars, and GM is just a few months away from meeting that goal.

"Cutting electric vehicle subsidies for GM would really mean almost not at all," explained Acevedo. "Really, they will beat everything on their own. They've had enormous momentum selling their EV and plug-in vehicles so they are very close to the 200,000 ground."

Trump talked with Prime Minister Justin Trudeau about GM loss Tuesday, with both leaders expressing disappointment.

GM said it will shut down five factories in Oshawa, Detroit, Ohio, Maryland and Michigan. The company has also announced plans to discontinue operations at three further plants outside North America by the end of 2019.

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