Ford Motor is reversing its plan to let dealers apply a $7,500 tax credit to electric vehicle leases after the expiration of the federal subsidy, the company revealed Thursday. The move comes on the heels of a similar decision by General Motors the day before.
“Ford will not claim the EV tax credit but will maintain the competitive lease payments we have in the market today,” a spokesperson said.
The federal tax credit for new electric and plug-in hybrid vehicles expired on September 30, but Ford and General Motors had planned to extend the benefit to customers by letting dealers purchase EVs from their inventory and claim the credit. The vehicles would then be leased with the $7,500 credit applied to reduce the final lease price.
Ford Credit is still offering 0% financing for 72 months, along with additional incentives to customers, according to the company spokesperson.
General Motors, however, chose to end the program following concerns raised by Republican Senator Bernie Moreno of Ohio, a former car dealer involved in auto policy, a source told Reuters. Ford and General Motors developed the strategies following consultations with the Internal Revenue Service (IRS).
The reason behind Ford’s decision to cancel its version of the program remains unclear.
The companies will now cover the cost of the discount on their own. Ford’s electric vehicle lease offers are anticipated to remain in place through the end of the year.
Several auto industry leaders, including Ford CEO Jim Farley, have cautioned that EV sales could see a sharp decline without the tax credit. However, others, like the head of Hyundai Motor North America, believe the electric vehicle market is strong enough to withstand the loss of such incentives.
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