Ford and General Motors are in a rush to enlist car dealers in initiatives that would effectively prolong the availability of a $7,500 USD tax credit on electric vehicle leases beyond the imminent expiration of the federal incentive, as reported by dealers and documents.
Both companies have recently introduced programs to their dealers where the automaker’s financing arm would kickstart the acquisition of EVs from dealers’ inventories by providing down payments on them. These undisclosed programs, as per dealers briefed on the matter and documents from the companies, would make the lending arms eligible for the federal tax credit on those vehicles through the down payments.
Following this, dealers would continue to offer leases on these vehicles to customers as usual for a few additional months, with the $7,500 subsidy integrated into the lease rate.
These initiatives aim to mitigate the impact of the tax credit’s termination, which has incentivized EV adoption for over 15 years. General Motors stated on Monday that they collaborated with their GM dealers to extend a special offer for customers to benefit from the tax credit on EV leases. Ford, on the other hand, mentioned that they are striving to provide competitive lease terms for Ford EV customers through Ford Credit until December 31.
Industry stakeholders anticipate a decline in EV sales and leasing post the tax credit expiration, following a surge in EV purchases in recent months by buyers attempting to beat the deadline. The end date of September 30 for the subsidy was set by President Donald Trump’s substantial tax legislation signed in July.
It remains unclear if other automakers are pursuing similar strategies to extend the timeframe to leverage the tax credit for selling their EVs.
Ford and GM developed these programs following consultations with officials from the Internal Revenue Service, according to sources familiar with the discussions. The IRS has not yet responded to requests for comments on the matter.
In August, the IRS stipulated that vehicles must be bought by September 30 to be eligible for the $7,500 USD tax credit. The agency clarified that demonstrating acquisition can be done by entering into a binding written contract and making a payment for the vehicle on or before September 30.
