Ford and General Motors are in a race to enlist car dealers in programs that would effectively prolong the availability of a $7,500 USD tax credit on electric vehicle leases beyond the federal subsidy’s expiration on Tuesday. According to dealers and documents, both companies have recently introduced initiatives to their retailers. Under these programs, the automakers’ financing arms would kickstart the purchase of electric vehicles in dealers’ inventory by providing down payments. These down payments would enable the lending arms to qualify for the federal $7,500 USD tax credit on the vehicles. Subsequently, dealers would proceed to offer leases on these vehicles to retail customers for several more months, with the $7,500 subsidy incorporated into the lease rate.
The primary goal of these programs is to mitigate the impact of the tax credit’s expiration, which has been in effect for over 15 years to promote the adoption of electric vehicles. General Motors stated on Monday that they collaborated with their GM dealers to extend an offer for customers to benefit from the tax credit for electric vehicle leases. Ford, on the other hand, expressed that they are striving to provide competitive lease payments to Ford EV customers through Ford Credit until December 31.
Industry insiders and analysts have anticipated a decline in electric vehicle sales and leasing following the subsidy’s termination. The tax credit’s end date was set to September 30 by U.S. President Donald Trump’s significant tax legislation signed in July. It remains uncertain if other automakers are pursuing similar strategies to extend their ability to leverage the tax credit for selling electric vehicles.
Ford and GM developed their programs after engaging in discussions with officials from the Internal Revenue Service. According to sources familiar with the discussions, an IRS spokesperson did not immediately offer a comment. In August, the IRS clarified that vehicles must be purchased by September 30 to qualify for the $7,500 USD tax credit. The agency stated that acquisition could be demonstrated by entering into a binding written contract and making a payment on the vehicle on or before September 30.