GM, Ford, Hyundai Extend EV Discounts After Tax Credit Ends
Automakers Step In to Maintain Sales Momentum Amid Policy Shifts
Key Takeaways:
- GM, Ford and Hyundai extended $7,500 discounts on some EVs after a federal tax credit expired Sept. 30, to sustain sales momentum.
- Automakers face slowing EV demand, higher tariffs that could add up to $5,500 per imported car and shifting consumer preference toward hybrids and gas models.
- GM and Ford are applying credits through leasing programs while Hyundai is offering direct rebates and price cuts, with incentives running through at least year-end.
[Stay on top of transportation news: .]
General Motors Co., Hyundai Motor Co. and Ford Motor Co. said they would extend discounts on certain electric models after a$7,500 federal tax creditexpired Tuesday, a bid to maintain momentum after a surge in third-quarter sales.
Car companies are stepping in to preserve discounts and smooth the sell-down of existing EV inventory after the federal EV subsidy phased out Sept. 30. GM and Ford are making the $7,500 discount available for leased vehicles that are in transit or on dealer lots. Hyundai’s offer applies to leases and purchases: The Korean automaker will kick in $7,500 in cash for the 2025 version of its Ioniq 5; it’s also lowering the price of the 2026 model by as much as $9,800, depending on the trim.
EV sales are expected to slow in coming quarters as President Donald Trump’s policy changes take hold and automakers dial back production and rejigger product plans to add more gas and hybrid models. Full battery-electric models have been a tough sell for many American car buyers, who’ve been turned off by high prices and spotty charging infrastructure.
“I wouldn’t be surprised if EV sales in the US go down to 5%” from about 10% now,Ford CEOJim Farley saidat a conference in Detroit this week. The EV market will be “way smaller than we thought.”
Automakers’ profits are already taking a hit to absorb the cost of US tariffs on imported vehicles and auto parts. Based on the trade agreements Trump announced this summer, tariffs could add an extra $5,500 to the cost of an imported vehicle, and $1,000 on US-assembled vehicles with imported components, according to researcher Cox Automotive.
EV Divergence
Growth in EV sales in the US are not expected to move much this decade, reaching 11% of the U.S. market by 2029 compared with 8.1% last year, according to aSeptember forecastby EY, a unit of consultant Ernst & Young Global.
But it’s a different story in other parts of the world. EY predicts EVs in Europe will make up more than half of new vehicle sales by 2032. In China, they’ll surpass half the market in 2033.
Automakers are pursuing different strategies to cope with the uneven pace of adoption. WhileHyundai is retoolingits$5.5 billion plantin Savannah, Ga., to make hybrids as well as EVs, it’s not downplaying their market relevance.
“I do believe because of the surge we saw in September, there’s going to be a reset in October, maybe November. But the EV market will settle,” said Randy Parker, CEO of Hyundai’s North America business.
“There was an EV market before the IRA and there’s going to be an EV market after the IRA,” he told reporters on a call Sept. 30, referencing former President Joe Biden’s climate bill, the Inflation Reduction Act.
RELATED:EV Sales Surged 21% as Buyers Raced to Nab Tax Credit
Hyundai said it’s dipping into its own pocket to fund the $7,500 cash rebate on the 2025 Ioniq 5 and the discounts on 2026 models.
Parker said the move “showcases our financial strength and the ability to navigate the market with a lot of uncertainty.”
Ford and GM are simply passing along the value of federal credits they already locked in through their finance arms.
GM Financial put a down payment on about 30,000 EVs before Oct. 1, which means the credit company can lease the vehicles with the tax credit baked into the price. Once a lease is written, the lender gets paid back by the Internal Revenue Service, said a person familiar with GM’s operations.
“Ford is working to provide Ford electric vehicle shoppers with competitive lease payments on retail leases through Ford Credit until Dec. 31,” the company said in a statement.
Want more news? Listen to today's daily briefing belowor go here for more info:
