Exclusive: Ford, GM launch programs to extend use of $7,500 EV lease credit

North America

Source: ReutersPublished: 09/30/2025, 08:12:15 EDT

Ford Motor Company

General Motors

Electric Vehicles

Tax Credit

Automotive Industry

News Summary

Ford and General Motors are rapidly rolling out programs for dealers to effectively extend the use of the $7,500 U.S. electric vehicle (EV) lease tax credit beyond its federal expiration on Tuesday, September 30. These programs enable the automakers' financing arms to initiate purchases of EVs in dealer inventory by making down payments, thereby qualifying these lending arms for the federal $7,500 tax credit per vehicle. Dealers will then offer leases on these cars to retail customers for several more months, with the $7,500 subsidy factored into the lease rate. This initiative aims to cushion the impact on EV sales and leasing following the expiration of the tax credit, which has been in place for over 15 years. Both companies stated these programs were devised after discussions with the Internal Revenue Service (IRS) to extend the period customers can benefit from the credit.

View Original Article →

Background

The U.S. federal government's $7,500 electric vehicle (EV) tax credit has been in place for over 15 years, designed to encourage EV adoption and consumer uptake. This subsidy has played a crucial role in stimulating the EV market's growth by reducing the effective cost of purchasing or leasing vehicles for consumers. However, President Donald Trump's massive tax bill, signed in July 2025, set the expiration date for this subsidy as September 30, 2025. This impending deadline prompted a surge in EV purchases in recent months as buyers sought to benefit from the credit before it ended. The IRS had previously clarified that vehicles must be purchased by September 30 to qualify for the $7,500 tax credit.

In-Depth AI Insights

What are the true underlying motivations behind major automakers circumventing the subsidy expiration? - This reflects a deeper, perhaps underestimated, dependence of the EV market on subsidies. Manufacturers are willing to incur additional financial and administrative overhead to maintain sales momentum, suggesting that market demand might not be self-sustaining without incentives. - It could also be a strategic move to stabilize dealer networks, preventing a sudden glut of EV inventory and a sharp drop in sales due due to the abrupt cessation of the credit, thereby preserving brand market share and future competitiveness in the EV segment. How might the Trump administration view these automaker 'extension' programs? - While these programs were developed in consultation with the IRS, they essentially bypass the subsidy termination date set by the President's tax bill. This could be perceived as a 'soft' resistance to the government's policy intent, potentially leading the administration to adopt stricter language or clearer enforcement mechanisms in future policy formulations to close such 'loopholes.' - Given the Trump administration's 'America First' stance and tendency to reduce government intervention in markets, this industry-led extension of subsidies, while technically legal, might not fully align with its broader goal of ending the credit through the tax bill, potentially facing future regulatory scrutiny or policy adjustments. What are the long-term implications of this trend of extending subsidies through leasing for the EV market's development? - This practice could further distort the market, creating stronger consumer expectations for subsidies and hindering the market's transition to full self-sufficiency. In the long run, over-reliance on subsidies might obscure the true cost of EVs, leading to greater market adjustment pressures once incentives fully disappear. - It may also encourage other automakers to follow suit, shifting market competition towards maximizing existing or expiring incentives rather than focusing on technological innovation or cost efficiency. This could lead to an unhealthy growth pattern for EV adoption, highly susceptible to policy fluctuations.