Ford and General Motors are in a rush to secure car dealers for initiatives that would effectively prolong the availability of a $7,500 USD tax credit on electric vehicle leases even after the federal subsidy expires on Tuesday. Both companies have recently introduced programs to their dealerships, where the automakers’ financing arms would kickstart the purchase of EVs in the dealers’ inventory by providing down payments. These down payments would make the lending arms eligible for the federal $7,500 USD tax credit on the vehicles. Subsequently, the dealers would continue to offer leases on these vehicles to customers for several additional months, with the $7,500 subsidy integrated into the lease rate.
The primary goal of these programs is to mitigate the impact of the tax credit’s discontinuation, which has been incentivizing EV adoption for over 15 years. General Motors stated on Monday that they collaborated with their dealers to extend a special offer for customers to benefit from the tax credit for EV leases. Ford, on the other hand, mentioned that they are striving to provide competitive lease payments for Ford EV customers through Ford Credit until December 31.
Industry insiders, including dealers, auto executives, and analysts, have foreseen a decline in EV sales and leasing post the tax credit expiration, especially after a surge in EV purchases in recent months by buyers aiming to meet the deadline. The tax credit’s termination was dictated by U.S. President Donald Trump’s comprehensive tax legislation, signed in July, which mandated the subsidy to end on September 30.
While Ford and GM have implemented these strategies following consultations with IRS officials, it remains uncertain if other automakers are pursuing similar tactics to extend their eligibility for the tax credit to sell EVs. In August, the IRS specified that vehicles must be bought by September 30 to qualify for the $7,500 USD tax credit, allowing acquisition through a binding written contract and payment on the vehicle on or before the deadline.
