Ford and GM Withdraw Plans for EV Tax Credit Extension

Ford Motor Company and General Motors (GM) have both retracted their plans to extend the $7,500 federal electric vehicle (EV) tax credit for leases, which expired on September 30, 2025. Initially, both automakers intended to utilize their financing divisions to purchase vehicles from dealer inventories, allowing them to claim the tax credit and pass the savings onto customers leasing EVs. However, following political pressure and scrutiny, both companies have decided against this approach.

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• Initial Plans: Ford and GM aimed to extend the EV tax credit by having their financing arms make down payments on EVs in dealer inventories, thereby qualifying for the tax credit. This strategy was designed to maintain consumer interest in EVs amid the expiration of the federal incentive.

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• Political Pressure: The plans faced backlash from Republican Senators Bernie Moreno (R-Ohio) and John Barrasso (R-Wyoming), who labeled the automakers' strategy as a loophole and a violation of Congressional intent. This scrutiny prompted GM to withdraw its plan first, followed by Ford shortly thereafter.

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

• Current Offers: Despite canceling the tax credit extension, Ford has stated it will continue to offer competitive lease payments and 0% financing for 72 months on new EVs. GM has also indicated it will self-fund lease incentives until the end of October.

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The withdrawal of the tax credit extension is expected to significantly impact EV sales. Industry experts predict a sharp decline in sales as the incentive that previously motivated consumers to purchase EVs is no longer available. Ford CEO Jim Farley has expressed concerns that the market share for EVs could drop from approximately 10-12% to as low as 5% without the federal subsidy. Conversely, Hyundai Motor North America's CEO, Randy Parker, remains optimistic about the resilience of the EV market.

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

Ford spokesperson Marty Günsberg confirmed, “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.” GM echoed a similar sentiment, stating, “After further consideration, we have decided not to claim the tax credit.”

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The plans by Ford and GM were criticized by Senators Moreno and Barrasso, who argued that the automakers were exploiting a loophole to benefit financially at the expense of taxpayers. Moreno stated, “This guidance, while well intentioned, is unfortunately being taken advantage of by certain car companies who wish to continue bilking the U.S. taxpayer.”

Ford Follows GM In Cancelling EV Federal Tax Credit Workaround

While both Ford and GM have canceled their plans, the exact reasons for Ford's decision remain unclear. The automakers had previously confirmed their strategies with the Internal Revenue Service, indicating that their initial plans were legally sound. However, the political backlash appears to have influenced their final decisions.

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

As the EV market adapts to the loss of federal incentives, automakers may need to explore alternative strategies to sustain consumer interest. This could involve direct price adjustments, dealer incentives, or regional rebate programs to fill the gap left by the expired tax credit. The industry will be closely monitored for how these changes will affect EV sales moving forward.

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