Ford Motor Company disclosed on Wednesday that it is unlikely that the currently available Mustang Mach-E electric vehicles in dealer showrooms will qualify for federal tax credits starting in January.
Last week, the U.S. Treasury issued guidance introducing new battery sourcing restrictions effective January 1, with the intention of reducing reliance on China within the U.S. electric vehicle (EV) supply chain. The existing model of the Mach-E currently qualifies for a $3,750 federal tax credit.
While Ford is still evaluating the eligibility of its F-150 Lightning EV truck for tax credits after January 1, the company did not provide specific details on why it expects the Mach-E to lose the credit.
The second-largest U.S. automaker has reported the sale of 35,908 Mach-E EVs in the U.S. during the first 11 months of the year, marking a 3.5% increase compared to the same period last year. In October, Ford announced a reduction in Mach-E production.
Ford had previously stated in October that it would delay about $12 billion in electric vehicle investments, including the postponement of its second battery plant in Kentucky. The company also temporarily cut one of three shifts at its Michigan plant, which manufactures the F-150 Lightning, citing various constraints, including supply chain issues.
Dealers were informed by Ford, through a bulletin seen by Reuters, about the potential expiration of the tax credit. The communication suggested that the looming deadline could serve as motivation for customers to make purchases before the year-end, emphasizing the opportunity to benefit from the credit.
In October, Ford conveyed to dealers that incentives for 2023 model Mach-E and F-150 Lightning sales and leases would be extended.
General Motors (GM.N) announced on Friday that it anticipates many of its electric vehicles qualifying for U.S. tax credits next year, following the implementation of stricter rules limiting Chinese battery content from January 1. Meanwhile, Volkswagen (VOWG_p.DE) expressed cautious optimism that its 2024 model year ID.4, assembled in Chattanooga, may qualify for the full $7,500 tax credit in the coming year.
In December 2021, Ford had projected a threefold increase in the output of its all-electric Mustang Mach-E, exceeding 200,000 units per year by 2023 for the North American and European markets.