Ford and General Motors are in a competitive race to secure agreements with car dealers for initiatives that would effectively prolong the availability of a $7,500 USD tax credit on electric vehicle leases beyond the upcoming expiration of the federal subsidy. Recent programs introduced by each company involve their financing arms facilitating the acquisition of EVs in dealers’ inventories by providing down payments, as revealed by dealers informed about the initiatives and documents from the companies. These down payments would allow the financing arms to qualify for the federal $7,500 USD tax credit on the vehicles, as confirmed by the documents and dealers.
Following this, dealers would proceed to offer leases on the electric vehicles to retail customers as usual for several additional months, with the $7,500 subsidy integrated into the lease rates. The primary goal of these programs is to lessen the impact of the tax credit’s expiration, which has long served to incentivize the adoption of electric vehicles. General Motors stated on Monday that they collaborated with their GM dealers to extend an offer that allows customers to benefit from the tax credit for EV leases. Similarly, Ford announced that they are striving to provide competitive lease payment options for Ford EV customers through Ford Credit until December 31.
Anticipations from dealers, auto industry executives, and analysts suggest a looming decline in EV sales and leasing post the tax credit’s expiration, following a surge in EV purchases in recent months driven by customers looking to beat the deadline. The tax credit’s end date was set for September 30 by U.S. President Donald Trump’s comprehensive tax bill signed in July. It remains uncertain if other automakers are pursuing comparable strategies to extend the timeframe for leveraging the tax credit to sell their EVs.
Ford and GM formulated their respective programs following consultations with officials at the Internal Revenue Service, as indicated by three sources familiar with the discussions. The IRS had previously stated in August that vehicles must be bought by September 30 to qualify for the $7,500 USD tax credit. The agency clarified that demonstrating acquisition could be done by entering into a binding written contract and making a payment for the vehicle on or before September 30.
