Ford, GM Would Be Hurt By End Of EV Tax Credit

By Douglas A. McIntyre Published Dec 28, 8:38AM EST

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Ford, GM Would Be Hurt By End Of EV Tax Credit — © Ford F-150 Lightning Platinum (2024) (53621481713) (BY 2.0) by Charles from Port Chester, New York

There is a drumbeat among the media and auto industry executives. If the Trump Administration eliminated the EV tax credit, often $7,500, the industry would face a major setback. This includes sales of the Ford Motor Co. (NYSE F | F Price Prediction) EV flagship F-150 Lightning and Cadillac’s new Lyriq and Optiq. It is still unclear when the tax credit will be cut or if it will be cut at all. A rise in EV purchases by year-end buyers indicates what many consumers believe. Ivan Drury of the automotive research site Edmunds said, “For consumers interested in an EV purchase, strike while the battery is hot.”

Eliminating the tax credit would mean that the EVs considered the future of the auto industry, would likely sell at a slower pace than they already are. In the third quarter, General Motors (NYSE: GM) said it sold 32,095 EVs against total US sales of 659,601. Ford’s number was 23,509 out of 504,039. F-150 Lightning sales were only 7,162 for the period.

The two large US car companies continue to hope their EV sales will surge with larger adoption across the American car buyer universe. Each has put billions of dollars into design and production. Each, however, has cut back on those investments. Hybrids have become the default product for people who want to own alternative energy vehicles. A significant challenge is that, according to Cox Automotive, only 8.9% of vehicles sold in the third quarter were EVs.

Car companies need the tax credit for another critical reason. Kelley Blue Book put the average price of a new EV at $56,000 in June compared to $49,000 for a gas-powered car. The lowest-priced F-150 Lighting is $62,995. Ford is pushing hard to sell these with 0% financing for 72 months for some models. It also gives away a home charger in a select number of cases.

In April 2023, the Biden Administration set a goal that 67% of all new cars produced in the US would be EVs by 2032. It has since backed off of that. Without the $7,500 tax credit, a high adoption rate is likely many years away.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.