General Motors said on Wednesday it has canceled a plan that would have allowed its dealers to continue offering a $7,500 federal tax credit on electric-vehicle leases after the government subsidy expired on September 30.
The company had developed a temporary program through its lending arm, GM Financial, to purchase electric vehicles in dealer inventory and apply for the federal credit. The incentive would then have been rolled into lease terms for customers through the end of the year. GM decided to drop the plan following concerns raised by Republican Senator Bernie Moreno of Ohio, a former car dealer involved in automotive policy discussions, according to a person familiar with the matter.
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“After further consideration, we have decided not to claim the tax credit,” GM said in a statement to Reuters, declining to comment further on the reasons behind its decision.
Moreno told Reuters he welcomed the automaker’s move. “The EV subsidies ended September 30 and I’m happy that every car company is going to abide by that,” he said. “I look forward to working with GM. We’re putting a lot of policies in place to protect our domestic auto industry.”
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The scrapped plan aimed to mitigate the impact of the subsidy’s expiration on dealers, who had expressed concern that electric vehicles would become harder to sell without the credit. GM had considered applying the incentive to as many as 20,000 vehicles in dealer stock or in transit, people briefed on the plan said.
In a statement, the company said it would continue to “fund the incentive lease terms” through the end of October. Documents shared with dealers indicated GM Financial had made down payments worth about 5% of the maximum price of each vehicle, or roughly $6,300 for two Chevrolet Blazer EVs priced in the mid-$60,000 range.
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GM’s program was put together in the final days before the tax credit’s expiration, with details shared during a dealer call on September 29, sources said. The automaker reportedly modeled its effort after a similar initiative introduced by Ford Motor before the deadline, though it remains unclear whether Ford is continuing its own program.
Analysts and dealers have warned that the end of the federal subsidy could slow EV sales in the near term. A surge of consumer demand to capture the credit before the September deadline contributed to record electric-vehicle sales that month.
Source: Reuters
Ford and GM Offer Dealer Programs to Extend $7,500 EV Lease Tax Credit – Report