A MAJOR part of President Donald Trump’s One Big Beautiful Bill Act has finally come to pass, taking away the $7,500 tax credit EV purchasers would receive for adopting the alternative-fuel vehicles.
However, some manufacturers have cleverly taken advantage of a curious loophole which will still allow their customers to reap the benefits of the tax credit, if they jump through two hoops first.
Ford’s tax credit approach has an end-of-year deadline on it[/caption]
General Motors’ brands include Chevrolet, Cadillac, and Buick, all of which either currently or will have EV offerings[/caption]
Prior to the tax credit’s expiry yesterday, Ford and General Motors successfully worked out a way to continue extending the $7,500 tax credit to EV purchasing customers beyond its September 30 deadline.
The manufacturers did so by initiating the purchase of the entire EV inventory its participating dealerships had in stock via their financial arms. These purchases were initiated via completed down payments.
Since these initial payments were completed before the deadline, they qualified for the tax credit and had their sticker prices reduced accordingly.
From there, the dealerships would lease these EVs to customers as usual, with the tax credit received by the dealership for that specific vehicle being factored into the lease rate.
This effectively passes the credit onto the consumer in the same it would’ve if they had purchased the vehicle prior to the deadline, albeit in a roundabout way.
However, purchasers must obviously lease the vehicles to qualify given the nature of this deal for one of the two requirements.
The other requirement is exclusive to Ford, which is working to provide EV customers with competitive leases via Ford Credit through the end of the year. In other words, drivers seemingly have until 2026 to get a discounted Ford EV.
Dealers looking to get in on each manufacturer’s program had specific participation deadlines, with GM’s being September 30 and Ford’s being September 26.
Both automakers also specified that the programs were created alongside discussions with officials at the Internal Revenue Service, per several people close to the situation who spoke with Reuters.
As of this writing, no other manufacturers have announced similar efforts to make their EV offerings as affordable a possible.
While the tax credits are being kept alive by some automakers, a number of other attractive EV incentives have disappeared following September 30.
One of the most significant is the termination of state-run Clean Air Vehicle Decal programs due to the necessary federal legislation that would’ve extended it not being passed in time.
Under these programs, EV drivers riding solo were able to use high-occupancy vehicle (HOV) lanes at any time of day despite not meeting the required passenger count.
EV drivers who are caught hogging the HOV lanes from September 30 onward could face fines of $400 or more depending on the exact state.
Why aren’t people buying EVs?
In January, many EV makers reported slow demand. Reuters said there are a few valid reasons for a slow in demand:
- High initial costs. Many automakers, like Tesla, Hyundai, and Ford have conducted “price slashes” on their flagship EVs to attract new buyers, though demand remains slow.
- Higher insurance costs. Some insurance companies cite fire risks, high costs of battery replacement, and higher vehicle weight as reasons for higher premiums.
- Charging anxiety. A large percentage of people remain fearful of being in a situation where they won’t be able to charge if they run out of battery due to a lack of infrastructure.
- Range anxiety. In many instances, EVs still don’t have the range and infrastructure of gas-powered vehicles.
- Poor performance in extreme temperatures. Reduced range in extremely hot or cold weather makes potential buyers wary.
Source: Reuters
Studies show that this incentive for EV adoption was even more influential than the $7,500 tax credit, further emphasizing how significant the discontinuation of these incentives is.
The programs also offered free parking in certain areas of specific major cities, and discounts on tolls for bridges and tunnels.
While some states are fighting to keep these programs alive, their efforts will likely be proven futile for ultimately needing federal authorization to do so, which is unexpected to come.
EVs OUT OF STYLE?
As these influential incentives are discontinued, mass market manufacturers are pulling away from their previous EV fleet goals, whether these goals were self-imposed or otherwise.
However, the Yangwang U9 Xtreme’s achievement of becoming the fastest production car of all time could give the alternative-fuel vehicles the popularity push they need.
Another major factor is the safety of EVs, with three people dying earlier this month after a crashed Tesla left them trapped inside the vehicle due to a lack of power to the electric doors.
