Ford and General Motors are in a race to secure 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 expiry on Tuesday. The automakers have recently introduced programs to their dealers, where the financing arm of the company would kick off the purchase of electric vehicles in the dealers’ inventory by providing down payments on them. These down payments would make the lending arms eligible for the federal $7,500 USD tax credit on those specific vehicles. Subsequently, dealers would proceed to offer leases on these vehicles to retail customers as usual for a few additional months, with the $7,500 subsidy factored into the lease rate.
The primary goal of these programs is to lessen the impact of the tax credit’s expiration, which has been in place for over 15 years to promote the adoption of electric vehicles. General Motors stated on Monday that they collaborated with their dealers to extend an offer for customers to benefit from the tax credit on EV leases. Ford, on the other hand, mentioned that it was striving to offer competitive lease payments on retail leases for Ford EV customers through Ford Credit until December 31.
Following the end of the tax credit on Tuesday, dealers, industry executives, and analysts anticipate a decline in electric vehicle sales and leases, subsequent to a surge in EV purchases in recent months as buyers rushed to meet the deadline. The expiration date for the subsidy was set on September 30 by U.S. President Donald Trump’s comprehensive tax bill signed in July.
It remains uncertain if other automakers are pursuing similar strategies to extend the timeframe during which they can leverage the tax credit to sell their electric vehicles. Ford and GM formulated their programs after consultations with officials at the Internal Revenue Service, as indicated by three individuals familiar with the discussions. In August, the IRS confirmed that vehicles must be bought by September 30 to qualify for the $7,500 USD tax credit, stating that proving acquisition could be done by entering a binding written contract and making a payment on the vehicle on or before the specified date.