by Automakers Found a Way to Extend the Electric Vehicle Tax Credit
The tax credit for clean vehicles formally ends today, however, companies Ford and General Motors have discovered a legal loophole that will allow them to offer this incentive for some more time. This is a smart move, as it will save buyers thousands of dollars and simultaneously allow the automakers to offer discounts unavailable to their competitors.
How the Extension Mechanism Works
As reported back in August, the US Internal Revenue Service published new clarifications regarding the cancellation of the credit. They stipulate that the incentive can be extended to vehicles received after September 30, provided a “written binding contract” is concluded and a symbolic payment is made.
The Strategy of the Auto Giants
Manufacturers seem to have taken advantage of this opportunity. Ford and GM decided to engage their financial companies to make the initial payments for the electric vehicles. This secured the right to the tax credit and, essentially, stopped the countdown for its utilization.
Implications for Customers
Thanks to this approach, the companies will continue to offer vehicles with the incentive. The details of the mechanism are somewhat unclear, but according to sources, when leasing an electric vehicle through the program, the customer’s payment already accounts for the application of the tax credit, and the financial company receives compensation.
A GM representative noted: “For the customer, it’s business as usual. They can come to the dealership on October 1st or October 31st, lease an electric vehicle, and receive the benefits of the credit if the dealer participates in the program and still has inventory.”
This situation demonstrates how large corporations can adapt to changes in legislation by finding alternative ways to support sales. Such actions often spark debates about fairness, but for consumers, they temporarily preserve the financial benefit. It can be expected that other manufacturers will also try to use similar approaches until the state makes adjustments to the rules.
