Ford and General Motors are in a race to enroll car dealers in initiatives that would effectively prolong the availability of a $7,500 USD tax credit on electric vehicle leases past the federal subsidy’s expiration on Tuesday, as per dealers and official documents. Both companies recently introduced programs to their dealers, involving their financing arms initiating the purchase of EVs from dealers’ stock 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 vehicles. Subsequently, dealers would offer leases on these cars to customers as usual for several additional months, with the $7,500 subsidy incorporated into the lease rate.
The main objective of these programs is to cushion the impact of the tax credit’s termination, which has been in effect for over 15 years to promote the adoption of EVs. General Motors stated on Monday that they collaborated with their dealers to extend an offer for customers to benefit from the tax credit for EV leases. Ford, on the other hand, mentioned that they are working to offer competitive lease payments on retail leases for Ford EV customers through Ford Credit until December 31.
Anticipations from dealers, auto industry executives, and analysts suggest a potential decrease in EV sales and leasing following the expiration of the tax credit, after a surge in EV purchases in recent months by customers aiming to beat the deadline. The end date for the subsidy was set on September 30 by U.S. President Donald Trump’s significant tax bill signed in July. It remains uncertain if other automakers are pursuing similar strategies to extend the timeframe to benefit from the tax credit in selling their EVs.
Ford and GM formulated these initiatives after consultations with Internal Revenue Service (IRS) officials, as reported by individuals familiar with the discussions. The IRS previously stated in August that vehicles must be purchased by September 30 to be eligible for the $7,500 USD tax credit, emphasizing that acquisition can be demonstrated by entering into a binding written contract and making a payment on the vehicle on or before the specified date.