Ford and GM Abandon Plans for EV Tax Credit Amid Political Pressure
Ford and General Motors (GM) have abandoned their strategy to maintain the $7,500 electric vehicle (EV) tax credit for consumers after Republican senators raised concerns regarding the plan, reports 24brussels.
Initially, the automakers were collaborating with their dealer networks to implement short-term programs that would allow customers to continue receiving tax credits on leased EVs through the end of 2025. This plan aimed to mitigate the impact of the tax credit expiring on September 30, 2025, with hopes of sustaining EV sales momentum.
While other manufacturers like Hyundai and Stellantis opted to introduce cash incentives to attract buyers, Ford and GM’s approach involved purchasing their EVs from dealers ahead of the tax credit’s expiration. The manufacturers intended for their finance divisions to make down payments on available electric models, allowing dealers to lease these vehicles at a reduced price with the tax incentive factored in.
However, GM withdrew from the initiative first, followed by Ford. The decision came after Republican Senators Bernie Moreno (R-Ohio) and John Barrasso (R-Wyoming) flagged the plan to the Treasury Department, labeling it “a loophole” and a misalignment with Congressional intent. Despite the criticisms, Ford and GM had previously received clearance on their strategy from the Internal Revenue Service, according to reports.
This decision comes at a time when both automakers were attempting to cushion the impact on consumers, as recent sales data indicated a spike in EV purchases during July and August due to the impending expiration of the tax credit. Analysts now predict that EV sales are likely to decline sharply without the incentive.
Update October 10th: Following the announcement, a Ford spokesperson stated: “Ford will not claim the EV tax credit but will maintain the competitive lease payments we have in the market today to continue providing customers with more affordable electric vehicle options. For customers who want to purchase an electric vehicle, Ford Credit continues to offer 0 percent financing for 72 months and other incentives.”
