Last week, it was announced that major automakers, specifically Ford and General Motors (GM), were collaborating with their dealer networks to introduce short-term programs aimed at maintaining the tax credit on leased electric vehicles (EVs) until the end of the year. This initiative was prompted by the tax credit’s expiration date of September 30, which raised concerns about potentially diminishing EV sales.
In contrast to other manufacturers like Hyundai and Stellantis, which have offered cash incentives to facilitate EV purchases, Ford and GM opted for a different strategy. They planned to acquire EVs from their own dealerships by having their financing divisions make down payments on all electric models before the tax credit’s expiration. Subsequently, these vehicles would be leased to consumers with a built-in $7,500 discount.
However, this strategy was short-lived as both GM and Ford decided to withdraw from the plan. GM was the first to exit on a Wednesday, followed by Ford. The withdrawal was initiated after Republican Senators Bernie Moreno and John Barrasso raised concerns with the Treasury Department, describing the initiative as a “loophole” that violated Congressional intent. Despite these concerns, Ford and GM had reportedly coordinated with the Internal Revenue Service regarding their plan.
The automakers aimed to alleviate financial pressures on consumers and maintain recent sales momentum, as EV sales surged in July and August due to buyers rushing to take advantage of the expiring tax credit. Analysts are now forecasting that EV sales may decline significantly following the credit’s expiration.
As of October 10, a Ford spokesperson indicated that while the company would not claim the EV tax credit, it would continue to offer competitive lease payments to provide customers with affordable electric vehicle options. Additionally, Ford Credit is still offering 0% financing for 72 months alongside other incentives for customers interested in purchasing an electric vehicle.
Source: https://www.theverge.com/news/798229/ford-gm-ev-tax-credit-lease-cancel