The Inflation Reduction Act of 2022 (IRA) has introduced a newly revised tax credit for electrified vehicles that offers buyers up to $7,500 back, depending on the type of vehicle they purchase, which is widely viewed as a boon not only for retail customers, but also commercial entities, suppliers, and automakers trying to sell more of those types of vehicles. Meanwhile, Ford – along with some other automakers – didn’t pass down the previous $7,500 tax credit to lessees, and also recently stopped letting those customers purchase EVs at the end of their lease terms, making some wonder if the automaker would change its stance on EV leases with the launch of the new credit. However, that doesn’t seem to be the case, according to a dealer letter recently seen by Cars Direct.
That letter states that “restrictions related to battery sourcing, vehicle MSRP, customer’s income, and North American assembly do not apply to the commercial credit,” which is now officially known as the Commercial Clean Vehicle Credit under Internal Revenue Code Section 45W. However, this doesn’t seem to apply to everyone, as the letter also states that “companies in the business of leasing electric vehicles are entitled to the commercial credit, provided they are the tax owner of the vehicle.”
This means that Ford will continue to keep the new tax credit for itself as it relates to retail EV leases, which is obviously bad news for customers looking to lease a new Blue Oval all-electric vehicle rather than finance or purchase it. Meanwhile, other automakers – including Volkswagen and Audi – are already taking advantage of this loophole, which allows manufacturers to circumvent domestic sourcing requirements and price caps by claiming a commercial credit and offering the $7,500 incentive to lessees.
Other automakers, including Toyota and Lexus, have slashed lease rates in response to these changes, working to make those vehicles financially appealing to customers. However, Ford customers that wish to claim this new credit will need to purchase those vehicles or opt for the hybrid Ford Options Plan instead.
We’ll have more on the new IRA tax credit soon, so be sure and subscribe to Ford Authority for ongoing Ford news coverage.
Ford is doing nothing nefarious here. This just boils down to a business decision they made that people looking to lease a Ford EV need to be aware of. Dealers also need to be upfront with these customers and let them know the lease of a Ford EV will not qualify them for the $7500 credit. Ford probably should have used some of the $7500 to fund a rebate incentive/cap cost reduction incentive for leased EVs. They could have offered leasees a $3000 lease incentive and still kept $4500 for themselves. But, as with any lease, the leasing company owns the vehicle and they set the terms. The leasee is just renting someone else’s property.
Correct, more people need to understand that when you lease a vehicle, it’s not yours. You are simply renting it.
More fundamentally, when you are selling all the EVs you can make, you aren’t going to goose the lease side of the business.
Ford is literally losing money on EVs, so not a surprise at all. Americans simply aren’t interested in any type of scale. This is a truck country, and the Lighting is not a real truck.