US Automakers Scale Back EV Incentives Amid Political Headwinds
Ford and General Motors have abandoned plans to extend a key $7,500 tax credit, raising concerns over future electric vehicle demand.
Major US automakers are hitting the brakes on efforts to prolong electric vehicle incentives, a move that signals potential headwinds for the EV market following the expiration of a major federal tax credit.
Ford and General Motors have both reversed course on plans to use a leasing loophole to extend a for customers. The decision came after the strategy drew criticism from Republican lawmakers, who argued the subsidies officially ended on September 30 and should not be extended through creative financing.
The automakers had initially planned for their financing arms to make down payments on EVs in dealer inventory before the deadline, claim the credit, and pass the savings to customers through more attractive lease deals. However, both companies have now pivoted to funding their own, smaller incentives.
GM, which had planned to apply the credit to roughly 20,000 vehicles, stated, "After further consideration, we have decided not to claim the tax credit." Instead, the company announced it would for EV leases through the end of October. Ford quickly followed suit, stating it "will not claim the EV tax credit but will maintain the competitive lease payments we have in the market today."
This abrupt reversal has stoked concerns on Wall Street about the resilience of EV demand without substantial government support. Analysts suggest a surge in September EV sales likely represented a as consumers rushed to secure the credit before its expiration, potentially leading to a sharp decline in fourth-quarter sales across the sector. The move reflects the delicate position of legacy automakers as they navigate a highly politicized EV transition, balancing investment in new technology with shifting regulatory landscapes and consumer affordability challenges.