Ford and GM’s Plans to Extend EV Tax Credit Fall Through

Last week, Ford and General Motors (GM) announced their plans to extend the electric vehicle (EV) tax credit for a limited time. This decision aimed to support customers who lease EVs, allowing them to benefit from the tax credit through the end of the year. However, both automakers have since abandoned this initiative.

GM and Ford’s Strategy for EV Sales

With the tax credit set to expire on September 30, Ford and GM intended to bolster EV sales by providing incentives. While other manufacturers like Hyundai and Stellantis opted for direct cash incentives, Ford and GM pursued a more complex approach. They planned to buy back EVs from their dealers using funding from their finance divisions, facilitating leases with a built-in $7,500 discount.

Political Pressures Influence Decision

These plans faced hurdles after Congressional scrutiny. Republican Senators Bernie Moreno (R-Ohio) and John Barrasso (R-Wyoming) alerted the Treasury Department, labeling the automakers’ strategy a loophole and a violation of Congressional intent. Following this backlash, GM was the first to withdraw from the plan.

Shortly after, Ford also decided to cease its efforts, as reported by Reuters. Despite earlier concerns, both automakers had confirmed their proposal with the Internal Revenue Service.

Impact on Electric Vehicle Market

The withdrawal of tax credit extensions is expected to significantly affect EV sales. Sales surged in July and August as consumers sought to capture the benefits of the expiring credit. However, industry experts predict a sharp decline in EV sales now that incentives are dwindling.

Current Offers from Ford

In a statement, Ford spokesperson Marty Günsberg clarified that although Ford will not pursue the EV tax credit, the company would maintain competitive lease payments. They aim to keep electric vehicles affordable for customers. Additionally, Ford Credit continues to provide attractive financing options, including 0% interest for 72 months.

• Key Dates:
  • September 30: Expiration of EV tax credit
• Further Incentives:
  • Ford offers 0% financing for 72 months

As the EV market adapts to these changes, consumers and industry observers will be closely monitoring the implications of the tax credit’s expiration.