Ford and GM just pulled off a creative financial maneuver to keep the $7,500 federal EV tax credit alive for customers after its September 30th expiration. The automakers are having their finance divisions purchase electric vehicles from their own dealers, then lease them to customers with the full discount built in - essentially gaming the system to preserve incentives that industry experts say are crucial for EV adoption.
Ford and GM just rewrote the playbook on government incentives. With the federal $7,500 EV tax credit expiring on September 30th, both automakers scrambled to create financing schemes that would keep the discount flowing to customers through the end of the year.
The mechanics are surprisingly straightforward. Ford Credit and GM Financial are essentially buying electric vehicles from their own dealer networks, securing the tax credit before the deadline, then leasing those same vehicles to customers with the $7,500 discount baked into monthly payments. It's a financial shell game that required IRS approval, which both companies secured according to three sources who spoke to Reuters.
"Ford is working to provide Ford electric vehicle shoppers with competitive lease payments on retail leases through Ford Credit until December 31st," Dan Barbossa, a Ford spokesperson, confirmed in an email. GM declined to comment, but dealer documents reviewed by Reuters show both programs launched simultaneously.
The timing couldn't be more critical. EV sales surged in July and August as buyers rushed to claim the credit before it vanished. Industry analysts predict a sharp drop-off without the incentive - something both automakers are clearly trying to avoid. The credit has been instrumental in making electric vehicles more price-competitive with gas cars, particularly in the crucial $30,000-$50,000 segment where most buyers shop.
But there's real financial risk here. Both Ford and GM are essentially betting their finance arms can move inventory quickly enough to avoid taking major losses on unsold EVs. If customer demand doesn't materialize, they'll be stuck holding expensive electric vehicles they technically own.
The eligible vehicle lists tell an interesting story about each company's EV strategy. Ford only had the F-150 Lightning pickup qualifying for the credit - the Mustang Mach-E didn't meet the battery sourcing requirements that became increasingly strict. Meanwhile, GM had a broader portfolio including the Chevy Equinox, Blazer, and Silverado EVs, plus the Cadillac Lyriq, Optiq, and Vistiq, and the GMC Sierra EV.
The financing workaround highlights just how dependent automakers have become on federal incentives to drive EV adoption. Without the $7,500 credit, electric vehicles lose a significant competitive advantage over gas-powered alternatives, particularly as battery costs remain elevated and charging infrastructure continues expanding.
Dealer networks have been pushing for creative solutions as they watched EV inventory pile up in anticipation of the credit's expiration. The financing programs give them a lifeline through the crucial fourth quarter sales period, when many consumers make major purchase decisions.
What's particularly clever about the approach is how it technically complies with IRS regulations while achieving the desired outcome. By having their finance divisions purchase vehicles before the September 30th deadline, both companies preserved eligibility for the credit on those specific units. The subsequent leasing arrangements transfer that benefit directly to consumers.
Both automakers are taking different approaches to risk management. Ford explicitly committed to the program through December 31st, while GM appears to be evaluating demand before making similar commitments. The cautious approach makes sense given the uncertain regulatory environment surrounding EV incentives.
The programs also reveal how quickly automakers can adapt when government policy creates market disruptions. Rather than accept reduced sales, both companies created entirely new financing structures in a matter of weeks. It's the kind of agility that will likely become more important as EV incentives continue evolving at both federal and state levels.
The Ford and GM financing schemes represent more than just creative accounting - they're a preview of how automakers will adapt to shifting government incentives. As federal EV support becomes increasingly uncertain, expect more companies to develop similar workarounds to maintain sales momentum. The success of these programs through December could influence how the industry approaches future policy changes, potentially creating a template for preserving consumer incentives even when government support wavers.
