Ford Backs Away From Pursuing EV Tax Credits After GM shift
DETROIT, Oct 26 – Ford Motor Co.has reversed course and will no longer seek to claim the full $7,500 electric vehicle tax credit for customers, following a similar decision by General Motors, according to sources familiar with the matter. The move comes as the Treasury Department prepares to finalize rules clarifying eligibility for the credits, which were established under the Inflation Reduction Act.
The shift by both ford and GM underscores the complexities and uncertainties surrounding the new EV tax credit rules, notably regarding sourcing requirements for battery components and critical minerals. Automakers had initially explored strategies to separate battery production and vehicle assembly to possibly qualify for the full credit, but now appear to be anticipating stricter interpretations from the government.This impacts consumers, potentially raising the upfront cost of electric vehicles, and complicates automakers’ plans to accelerate EV adoption.
Ford had been considering a plan to claim the credit by structuring its battery production as a separate legal entity, a strategy GM also evaluated. Though, both companies now believe that approach is unlikely to be approved by the Treasury Department, the sources said.
The Inflation Reduction Act aims to incentivize domestic battery production and reduce reliance on foreign supply chains, particularly China, for critical minerals. To qualify for the full $7,500 credit, EVs must meet specific requirements related to battery component sourcing and the origin of critical minerals. The Treasury Department is expected to release final guidance in the coming weeks,which will provide greater clarity on these requirements.
“We’re watching the guidance closely and will adjust our strategy as needed,” a Ford spokesperson said, declining to comment specifically on the company’s decision.
The U.S.government’s intention is to foster a robust domestic EV supply chain, but the evolving rules have created uncertainty for automakers and consumers alike. The delay in clarity has also slowed some EV investment decisions as companies await final guidance. The outcome will significantly influence the pace of EV adoption and the competitiveness of the U.S. automotive industry in the global market.
