By Mike Colias and David Shepardson
(Reuters) – General Motors has decided to terminate a program that allowed its dealers to continue offering a $7,500 tax credit on electric-vehicle leases for several months after the federal subsidy expired on September 30, the company announced on Wednesday.
At the end of last month, GM had developed a plan for its in-house lending division to begin purchasing EVs from its dealers. The intention was to secure the federal $7,500 credit for those vehicles and incorporate that amount into leasing agreements for customers through the year’s end.
The automaker abandoned the initiative following concerns voiced by Republican Senator Bernie Moreno of Ohio, a former auto dealer with a vested interest in automotive legislation, a source familiar with the situation informed Reuters.
“After further evaluation, we have opted not to pursue the tax credit,” the company stated in a message to Reuters on Wednesday, without providing further detail about the rationale behind its decision.
Moreno expressed his approval of GM’s choice to withdraw from the EV tax-credit initiative during an interview with Reuters. “The EV subsidies concluded on September 30, and I am pleased every car manufacturer will respect that.” He added, “I look forward to collaborating with GM as we implement various policies to safeguard our domestic automotive sector.”
The objective of the abandoned program was to mitigate the impact of the tax credit’s expiration for dealers, who were concerned about potentially being left with unsold EVs. According to insiders, GM was set to apply for the credit on tens of thousands of electric vehicles held by dealers.
Ford had implemented a similar plan prior to the tax-credit expiry, though it remains unclear whether Ford is continuing its program as a spokesperson declined to provide comments.
Reports indicate that GM aimed to claim the credit on approximately 20,000 EVs either present on dealership lots or in transit to them. Sources mentioned that its financial division, GM Financial, had initiated down payments for those vehicles before the subsidy deadline.
In a statement on Wednesday, GM indicated that it would “support the incentive lease terms” only through the end of October.
The method used to calculate the down payments made by GM Financial to dealers for these EVs was set at 5% of the maximum sale price for each vehicle. For instance, GM Financial would have provided a down payment of around $6,300 for two Chevrolet Blazer EVs, which are priced in the upper $60,000s, as outlined in documents shared with dealers detailing the program’s terms.
