Ford Reverses EV Lease Credit Extension Plan

Ford Cancels EV Lease Credit Plan

Ford has decided to cancel its plan to keep the $7,500 federal tax credit for electric vehicle (EV) leases active until the end of the year. This move comes after the tax credit was officially discontinued on September 30. The automaker had previously proposed a solution where dealers could purchase EVs from their inventory and claim the tax credit, allowing customers to lease the vehicles with the credit already included in the final price.

This decision mirrors a similar move by General Motors (GM), which also initially planned to extend the lease credit but later changed its stance. Ford’s spokesperson confirmed that the company will no longer claim the EV tax credit but will continue to offer competitive lease payments. Currently, Ford Credit provides 0% financing for 72 months on new EVs, along with other incentives, as stated by the company.

GM\’s Shift in Strategy

Earlier this week, GM also withdrew from a similar initiative. Initially, the company intended to pass on the discount to consumers at participant dealers while supplies lasted. However, after dropping the support scheme, GM announced it would self-fund the lease incentives until the end of October. Both Ford and GM developed their strategies following discussions with the Internal Revenue Service (IRS), as reported by Reuters.

The cancellation of the tax credit program by GM came after U.S. Senator Bernie Moreno, who owns a luxury car dealership empire in Ohio, sent a letter to U.S. Treasury Secretary Scott Bessent criticizing “certain car companies who wish to continue bilking the U.S. taxpayer.” The reasons behind Ford’s decision remain unclear.

Impact on the American EV Market

The American EV market is expected to face significant challenges following the Trump administration’s decision to terminate the $7,500 federal tax credit at the end of last month. Ford CEO Jim Farley expressed concerns that the EV market share could drop from the current level of roughly 10-to-12% to just 5%.

In contrast, Hyundai Motor North America’s CEO, Randy Parker, remains confident in the resilience of the American EV market. As the tax credit ends, various automakers are introducing new deals and discounts to attract customers. For example, Rivian is offering $6,500 off R1T and R1S leases. Additionally, the 2026 Hyundai Ioniq 5 is now available at up to $9,800 cheaper as tax credits expire.

Industry Reactions and Future Outlook

With the tax credit no longer available, automakers are adjusting their strategies to maintain customer interest. This shift highlights the importance of alternative incentives and promotional offers in sustaining the growth of the EV market. Analysts predict that the industry will see more competition and innovation as companies seek to fill the gap left by the expired tax credit.

As the EV landscape evolves, the focus will likely shift towards affordability, performance, and consumer education. Automakers must find new ways to engage potential buyers and ensure that the transition to electric vehicles remains smooth and accessible for all.