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

By Mike Colias

DETROIT (Reuters) -Ford and General Motors are racing to sign up car dealers for programs that would effectively extend the use of a $7,500 U.S. tax credit on leases of electric vehicles beyond the Tuesday expiration of the federal subsidy, according to dealers and documents.

Each company in recent days has rolled out programs to their retailers under which the automaker's financing arm would initiate the purchase of EVs in dealers’ inventory by making down payments on them, according to dealers briefed on the previously unreported programs and documents from the companies.

Those down payments will qualify the lending arms for the federal $7,500 tax credit on those vehicles, according to the documents and dealers. From there, dealers would offer leases on those cars to retail customers as usual for several more months, with the $7,500 subsidy factored into the lease rate.

The programs are aimed at softening the impact of the disappearance of the tax credit, which has been in place for more than 15 years to encourage EV adoption. 

"We worked with our GM dealers on an extended offer for customers to benefit from the tax credit for leases” of EVs, GM said in a statement to Reuters on Monday. A Ford spokesperson did not immediately comment.

Dealers, auto executives and analysts have predicted that EV sales and leasing would plummet following Tuesday's expiration of the tax credit, after a rush on EVs in recent months from buyers seeking to beat the deadline.

U.S. President Donald Trump’s massive tax bill, signed in July, set the September 30 end date for the subsidy.

It was unclear if other automakers were pursuing similar tactics to extend the period through which they can take advantage of the tax credit to sell their EVs. 

Ford and GM devised their programs after discussions with officials at the Internal Revenue Service, according to three people familiar with the discussions. An IRS spokesperson did not immediately respond to a request for comment.

In August, the IRS said vehicles must be purchased by September 30 to qualify for the $7,500 tax credit. 

“You can demonstrate acquisition by entering into a binding written contract and making a payment on the vehicle on or before Sept. 30,” the agency said.

(Reporting by Mike Colias; Editing by Jamie Freed)