Why General Motors Shares Spiked Monday

Shares of General Motors (NYSE: GM) jumped as much as 6% Monday after the Senate passed the Inflation Reduction Act Sunday, which has some major climate change provisions to help electric vehicle (EV) sales. GM stock was still up 4.7% as of 3:32 p.m. ET.

The new legislation passed by the Senate this weekend is now likely to be approved by the House of Representatives and signed into law by President Joe Biden. It's especially meaningful for General Motors thanks to its extension of EV tax credits for consumers, including for those buying established EV maker vehicles. Prior credits ended after a manufacturer sold its 200,000th electric vehicle. But this bill replaces that provision with several other requirements. Importantly for GM, some of its offerings will now qualify even with the newer restrictions.

GM has been in the EV business for more than a decade with its Chevrolet Volt. It has sold enough to surpass the existing tax credit limit. GM is now ramping up its EV offerings, and plans to exclusively offer electric vehicles by 2035.

Source Fool.com