In a strategic move that preserves a key incentive for electric vehicle adoption, automotive giants Ford and General Motors have unveiled new programs to extend $7,500 in savings on EV leases. This crucial decision comes as a lifeline for consumers just as the long-standing federal tax credit for electric vehicles is set to expire on September 30th.
The announcement effectively bypasses the impending expiration, ensuring that customers walking into dealerships in the coming months won't miss out on the significant financial benefit that has helped drive EV sales for years.
The End of an Era for the EV Tax Credit
The federal tax credit, a fixture in the American EV market for 17 years, was designed to accelerate the adoption of clean-energy vehicles. Its demise was triggered when President Donald Trump signed the July tax bill into law, which did not include an extension for the consumer incentive program. For buyers purchasing an EV outright, the clock is ticking to secure the tax credit before the September 30th deadline.
However, the landscape for leasing, a popular alternative to purchasing, is about to change dramatically thanks to the ingenuity of the two Detroit automakers.
How the New EV Lease Savings Program Works
So, how can Ford and GM offer a $7,500 incentive after the federal program sunsets? The answer lies in a clever interpretation of the tax code that benefits both the companies and their customers.
The automakers' programs are structured around their internal financing arms—Ford Credit and GM Financial. Instead of the individual consumer claiming the tax credit, the companies will initiate the purchase of EV inventory from their dealers. As the entity purchasing the vehicle, the financing arm qualifies for the $7,500 commercial clean vehicle credit.
This credit is then factored directly into the cost of the lease, effectively lowering the capitalized cost and resulting in lower monthly payments for the customer. From the lessee's perspective, the process is seamless; they simply see the advertised $7,500 in savings applied to their lease agreement as if the old tax credit were still in effect.
According to a recent report from Reuters, this strategy was developed after careful consultations with the Internal Revenue Service (IRS) to ensure compliance. According to a recent report from Reuters, this strategy was developed after careful consultations with the Internal Revenue Service (IRS) to ensure compliance.
A Ford spokesperson confirmed that these lease savings through Ford Credit will be available to customers until the end of 2025, providing a long-term window for shoppers to access the incentive. It remains unclear whether other automakers have secured similar agreements with the IRS, potentially putting Ford and GM at a competitive advantage in the near-term EV lease market.
A Glimmer of Hope for Last-Minute Purchasers
For those committed to buying an EV rather than leasing, there is still a narrow path to eligibility for the expiring tax credit. The IRS has previously clarified that a buyer can secure eligibility by making a "written binding contract" to purchase a vehicle before September 30th. This can be achieved by paying a non-refundable deposit, even if the final transaction and vehicle delivery occur after the deadline.
This nuance provides a critical opportunity for consumers who have been waiting for a specific model to arrive at their dealership or who are caught in the final days of the quarter.
What This Means for the EV Market
The proactive measures by Ford and GM signal a strong commitment to maintaining momentum in the electric vehicle sector. By absorbing the complexity of the expiring credit and translating it into straightforward consumer savings, they are preventing a potential slowdown in EV adoption.
For now, shoppers interested in leasing a new electric vehicle from either Ford or GM can breathe a sigh of relief. The $7,500 incentive, a powerful motivator for many, will remain on the table for years to come, ensuring that the drive toward an electric future doesn't stall out at the finish line.
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