Automakers are working accounting magic to extend the EV tax credit beyond its deadline

The $7,500 EV tax credit expired yesterday, September 30. Logically, electric vehicle sales are now expected to fall off.

But some automakers, including Ford, GM, and luxury EV maker Lucid, have found ways to effectively extend the credit for some customers.

According to reporting by Reuters, Ford and GM have initiated plans to dealers that would have the automakers themselves put down payments on EVs currently in inventory at dealerships.

Those down payments would qualify for the expiring tax credit, and dealers would be able to extend the subsidy to future customers through discounted lease rates.

Reuters reports that the programs were launched following discussions between the automakers and the IRS.

Meanwhile, Tesla is selling a lot of Teslas. Like all EV makers, it’s been seeing lots of sales as would-be buyers pulled forward purchases to take advantage of the now expired incentive, and Tesla, for its part, has been leaning in by offering the biggest discounts of any EV maker and prominently advertising the end of the $7,500 credit to juice sales.

The Takeaway

This coming quarter is going to be extremely interesting for major automakers as they chart a path forward in the absence of the credit. Of course, a pull forward in demand necessarily eats into future demand, which could be stifled further by what might be a de facto $7,500 price increase. However the automakers manage to dull the impact of that blow is going to have a major effect on their balance sheets, and it remains to be seen exactly how interested people are in electric vehicles absent the incentive.