General Motors announced on Wednesday that it is offering incentives on electric vehicles in response to the recent loss of federal tax credits, while Ford Motor is implementing price hikes for some of its F-150 EVs. This decision comes in the wake of new battery sourcing requirements issued by the U.S. Treasury, aiming to reduce the dependence on Chinese supplies in the electric vehicle supply chain.
GM will provide $7,500 incentives for qualifying electric vehicles following the loss of federal tax credits, with plans to reinstate these incentives for the Cadillac Lyriq and Chevy Blazer EVs after sourcing changes in early 2024. As a result of the new guidelines, which went into effect on Monday, vehicles that are no longer eligible for the credit due to the change in sourcing will be compensated for an equivalent purchase amount of the EV tax credit.
On the other hand, Ford is making adjustments to the prices of its F-150 Lightning EVs. This includes raising the price of some models by $2,000-$7,000 while cutting prices of premium models by $5,000. In light of these changes, the new prices for 2024 Ford F-150 Lightning models have been revealed including the mandatory $2,095 destination fee, which has seen an uptick compared to 2023. However, it is important to note that the top trims may not qualify for the EV tax credit due to an $80,000 price cap.
Other details to keep in mind are that some models such as the VW ID.4, Nissan Leaf, and specific Tesla Model 3s are no longer eligible for federal tax credits. With the changes in federal EV tax credits, the number of EV models qualifying for tax credits has been significantly reduced. Furthermore, the 2022 Inflation Reduction Act law has altered the criteria for EV tax credit eligibility by requiring vehicles to be assembled in North America, effectively eliminating numerous eligible models.
Despite these changes, it is important to note that the rules governing EV tax credits include a loophole that allows leased EVs to qualify for $7,500 tax credits without certain requirements. Companies like Ford are exploring options to offer cash incentives for leased vehicles, potentially boosting the appeal of leasing an electric vehicle.
In terms of the future, companies like Volkswagen are in the process of confirming their eligibility for federal EV tax credits to provide further support to potential electric vehicle buyers. Ultimately, these changes in tax credit eligibility will likely influence the purchasing decisions of EV buyers, and they are crucial to consider for automakers and dealerships.
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