Ford and General Motors are in a race to secure commitments from car dealers for initiatives that would effectively prolong the availability of a $7,500 USD tax credit on electric vehicle leases beyond the federal subsidy’s upcoming expiration on Tuesday. This information, as per dealers and documentation, reveals that both companies have recently introduced programs to their retailers. These programs involve the automakers’ financial arms initiating the purchase of electric vehicles (EVs) from dealers’ inventories by providing down payments, according to dealers briefed on the undisclosed programs and company documents.
The down payments made by the financing arms would make them eligible for the federal tax credit on those specific vehicles, as stated in the documents and by dealers. Subsequently, dealers would proceed to offer leases on these vehicles to retail customers for several additional months, with the $7,500 subsidy factored into the lease rates.
The main objective of these programs is to mitigate the impact of the tax credit’s expiration, which has long been utilized to promote the adoption of EVs. General Motors confirmed that they collaborated with their dealers to extend an offer allowing customers to benefit from the tax credit for EV leases. Ford, on the other hand, stated that they are striving to offer competitive lease payments on retail leases for Ford EV customers via Ford Credit until December 31.
Industry stakeholders have foreseen a decline in EV sales and leasing following the tax credit’s expiration on Tuesday, after a surge in EV purchases in recent months by buyers aiming to beat the deadline. The tax credit’s end date on September 30 was established by U.S. President Donald Trump’s significant tax bill signed in July.
It remains unclear whether other automakers are pursuing similar strategies to extend the timeframe during which they can leverage the tax credit to sell their EVs. The initiatives by Ford and GM were developed following discussions with Internal Revenue Service officials, as indicated by sources familiar with the discussions. The IRS has yet to respond to requests for comments. In August, the IRS specified that vehicles must be bought by September 30 to qualify for the $7,500 tax credit, allowing for acquisition through a binding written contract and a payment made on the vehicle on or before the specified date.
