Ford, GM Scrap EV Tax-Credit Workaround After GOP Blowback

Ford and General Motors have pulled the plug on a short-lived plan to keep the $7,500 federal EV tax credit flowing through the end of the year — even though the credit expired September 30. The retreat came after two Republican senators flagged the maneuver to the Treasury Department, calling it a “loophole.”

Here’s what the automakers were trying to do. Instead of dangling temporary cash rebates like Hyundai and Stellantis, Ford and GM worked with their dealer networks on a lease-based end run. Their finance arms would effectively “buy” EVs sitting on dealership lots by fronting down payments before the deadline, then have dealers lease those vehicles to customers with the $7,500 baked into the monthly payment. According to Reuters, the companies even cleared the approach with the IRS.

Then the politics arrived. GM blinked first on Wednesday, scrapping the program after Sens. Bernie Moreno (R-Ohio) and John Barrasso (R-Wyo.) flagged it to Treasury, blasting the effort as a “total violation of Congressional intent.” Ford followed suit soon after.

The timing stings for dealers. EV sales jumped in July and August as shoppers rushed to lock in the credit, and many on the retail side hoped a short bridge would keep momentum from collapsing this fall. Without the subsidy, analysts expect a chill — at least in the near term — as price-sensitive buyers reassess.

Ford says it’s not leaving customers empty-handed. Spokesperson Marty Günsberg said the company “will not claim the EV tax credit but will maintain the competitive lease payments we have in the market today” and will keep pushing purchase offers like 0% financing for 72 months through Ford Credit. GM hasn’t detailed replacement incentives, but with the credit gone and inventories building at some brands, expect more old-fashioned discounting to do the heavy lifting.

The lease workaround is dead, the politics are very much alive, and the EV market is about to find out how much of its recent heat came from Washington — and how much can be sustained on price cuts, financing deals, and plain buyer desire.

The original story by Andrew J. Hawkins for the Verge.