NADA Alert to Dealers re EV Incentives
Jan. 16, 2025 | NADA Issue Alert to Dealers
Key Developments Affecting the Availability of Tax-based Incentives for EVs in 2025
Dealers with EVs in their current inventories should be aware of recent developments that could have an impact on the availability of federal tax-based EV lease and sales incentives in 2025.
The changes in incentive availability could show up in a number of ways:
On the positive side, the IRS yesterday renewed for 2025 a safe harbor that lessors rely on in offering lease promotions based on EV tax incentives. This should permit lessors to continue offering those promotions.
On the negative side, some tax-based EV incentives may become less available this year.
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? First, “30D” tax incentives for consumer purchases are only available if the vehicle contains a certain percentage of components and battery materials from domestic sources, and those percentages go up each year on January 1. As a result, the number of vehicles offered by NADA members that qualify for these tax incentives went down on January 1, 2025, and currently stands at eleven.
? In addition, since 30D incentive qualification is measured on the day the dealer sells the vehicle to the consumer (rather than on the day the vehicle is sold to the dealer by the OEM), some vehicles that qualified for the tax credits in 2024 do not qualify as of January 1st.
? President-elect Trump and the Republican Congress have indicated that they would like to undo the EV tax incentives. This is especially true for the tax credit that auto lessors have been using to support EV lease promotions. As a result, dealers could see a reduction or elimination of clean vehicle tax credits, including the lease programs that have been supporting upwards of 80% of EV deliveries vanish at some point.
Dealers carrying EVs in their current inventories may consider taking advantage of the EV tax credits, and the lease programs based on them, before the potential foregoing changes occur. Please watch for future guidance from NADA on this issue.
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1 个月I’m very surprised that with the collective power of Franchise Dealers (esp GM & Ford) that they would allow for the Administration to simply ‘get rid’ of Incentive Money that is intended to ease the cost burden of market adoption and directly benefit their consumers. Also, how is it that Tesla (Leasing) has been able to benefit for years and now all of a sudden that their hold on the EV Market Share is being challenged the CVC is troublesome for everyone else. Smells fishy.
Still plays with ?? ?? cars - Former GM- Founder of Three Automotive Startups
1 个月Will the OEMs dump the EV inventory they have on the dealers before the tax credits go away?