So much for Ford and GM’s scheme to extend the EV tax credit

Ford and GM are both backing off their effort to continue offering the $7,500 electric vehicle tax credit to customers through the end of the year, Reuters is reporting.

Last week, it was revealed that the automakers were working with their respective dealer networks on short-term programs that would allow customers to continue to receive the tax credit on leased EVs through the rest of the year. With the tax credit expiring on September 30th, Ford and GM were hoping to keep offering the discount to customers for a short while in order to buoy EV sales.

While automakers including Hyundai and Stellantis have offered cash incentives to bridge the gap for buyers, Ford and GM took a different approach. They sought to buy EVs from their own dealers by having their finance divisions put down payments on all the electric models in their inventory before the tax credit expires. The dealers would then lease the vehicles to customers with a $7,500 discount baked into the price.

But now that plan is essentially moot. GM dropped out first, on Wednesday, followed by Ford, Reuters says. GM opted to kill the plan after Republican Senators Bernie Moreno (R-Ohio) and John Barrasso (R-Wyoming) flagged the plan to the Treasury Department, calling it “a loophole” and “the total violation of Congressional intent by these nefarious actors.” Even so, Ford and GM did clear their plan with the Internal Revenue Service, according to Reuters.

The automakers were hoping to soften the blow on car shoppers and keep up the momentum that many dealers have been seeing in recent weeks. EV sales spiked in July and August as shoppers rushed to claim the credit before it expired on September 30th. Experts are predicting that now that the credit is gone, EV sales are likely to plummet.