Ford, GM, & Other Automakers Pushing to Keep US EV Tax Credits, Especially Leasing One
As I just wrote, the wheels are now in motion to kill the US EV tax credit (or, well, all three of them — the $7,500 one for certain new EV purchases, the $7,500 one for EV leasing, and the $4,000 one for used electric cars). One would think that Elon Musk could use his newfound power for one useful thing, but he apparently has no interest in it. However, Ford and GM are reportedly trying to stop Republicans from killing the EV subsidies, as well as some other unnamed automakers.
“Automakers are lobbying against Washington lawmakers ending popular electric-vehicle tax credits that President Donald Trump has railed against, pushing instead for a gradual phase-out over several years,” Transport Topics reports. One top proposal seems to be a 3-year phaseout of the subsidies.
Another compromise being proposed is just keeping the leasing tax credit. Of course, that is the broadest and most used, as it’s a loophole that allows for the tax credit to be applied to every single EV model, not just ones using batteries not sourced in China. It also goes to the auto dealer, not the consumer, but is theoretically passed on to the consumer. Automakers have been able to offer great, competitive leases on electric vehicles thanks to this incentive and have moved a lot of EVs this way.
“It’s not immediately clear if Trump is receptive to the idea, or whether automakers can find enough votes among Republicans in Congress to keep EV incentives in place. But the industry is making the case that thousands of jobs now rely on electric vehicles, and that a disproportionate number of EV and battery plants are in Republican states like Ohio, South Carolina, Georgia and Alabama that make up what’s now sometimes referred to as the U.S. ‘Battery Belt.'” Indeed, most electric cars and EV batteries are produced in “red states” now. Are US senators and representatives from those states really going to decide to vote against big companies providing jobs in areas they represent?
Of course, this. is just bad for the auto business overall. “We have the potential repeal of various IRA elements,” Ford CEO Jim Farley said this week. “We’ve already sunk capital. And many of those jobs will be at risk if the IRA is repealed, big parts of it is repealed.” This kind of yo-yo policymaking is bad for business. It makes big factors influencing a company’s bottom line highly unpredictable. It just doesn’t make economic sense to hack away at these EV subsisidies today.
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