Ford and GM Launch Innovative Programs to Maintain EV Incentives Amidst Federal Tax Credit Termination
In the wake of the federal government's decision to discontinue the $7,500 electric vehicle tax credit, major automakers Ford and General Motors have proactively implemented their own inventive programs. These initiatives, forged in partnership with their extensive dealer networks, are designed to seamlessly transfer the equivalent of the former federal incentive directly to consumers. By doing so, the companies aim to sustain the momentum of electric vehicle adoption and alleviate concerns about reduced demand following the policy shift.
Automotive Giants Counter Federal EV Incentive Withdrawal with Proprietary Programs
On October 1, 2025, a significant shift in the landscape of electric vehicle incentives unfolded. The federal government, under a new directive from the Trump administration, officially terminated the long-standing $7,500 EV tax credit, which had supported electric vehicle buyers for over 15 years. This decision, enacted on September 30, prompted a rapid response from two of America's automotive titans: Ford and General Motors. These companies, through their respective financing arms, developed and launched programs intended to essentially replace the lost federal subsidy.
The core mechanism of these new programs involves the automakers' financing divisions, such as Ford Credit, purchasing electric vehicles from dealer inventories. By doing so, these financing entities become eligible for the federal tax credit, as they are technically the initial buyers. Subsequently, these vehicles are offered to consumers through lease agreements. The $7,500 incentive is then factored into the lease terms, effectively reducing the overall cost for the end-user. General Motors confirmed to Reuters that it has collaborated with its dealers to provide this extended offer, ensuring customers continue to benefit from an equivalent incentive when leasing. Ford has committed to providing "competitive" lease payments through Ford Credit until December 31, underscoring their dedication to maintaining market accessibility for their electric models.
The federal government's rationale for discontinuing the tax credit was articulated by President Trump, who emphasized fostering a "free and fair market" as a cornerstone of a healthy capitalist economy. However, critics argue that this perspective conflates equality with equity. Automakers largely anticipate a downturn in electric vehicle sales without such incentives, as consumers may be hesitant to embrace unfamiliar electrified technologies. Subsidies, they contend, have played a crucial role in leveling the playing field for emerging EV markets, encouraging consumers to transition from traditional internal combustion engine vehicles. While other manufacturers' plans for similar incentive programs remain uncertain, at least one state has indicated its intention to introduce its own localized EV incentives.
This decisive action by Ford and GM demonstrates a powerful commitment to the future of electric mobility, even in the face of shifting governmental policies. It highlights the industry's ability to innovate and adapt, ensuring that the transition to sustainable transportation continues to be supported for consumers. It also underscores the potential for private sector leadership to fill voids left by changes in public policy, maintaining market stability and encouraging technological advancement.