Unlikely Mustang Mach-E EV will qualify for US federal tax credits in January: Ford

Ford Motor Company indicated that its Mustang Mach-E electric vehicles currently available in dealer showrooms might not meet the criteria for federal tax credits starting in January, as per the recent guidance issued by the US Treasury. This guidance, set to take effect on January 1, outlines new restrictions on battery sourcing aimed at reducing reliance on Chinese suppliers within the US EV supply chain. Presently, the Mach-E qualifies for a $3,750 federal tax credit.

While Ford is assessing whether its F-150 Lightning EV truck will still qualify for tax credits post-January 1, the company didn't specify the reasons behind the expected ineligibility of the Mach-E for the credit.

Ford has observed a positive trend in Mach-E sales, with 35,908 units sold in the US during the first 11 months of the year, marking a 3.5 per cent increase from the same period last year. However, in October, Ford announced a reduction in some Mach-E production.

In October, Ford delayed approximately $12 billion in EV investments, including the postponement of its second battery plant in Kentucky. Additionally, due to multiple constraints, such as supply chain issues, Ford temporarily reduced one of the three shifts at its Michigan plant, which manufactures the F-150 Lightning.

To incentivise sales before year-end, Ford notified dealers about the tax credit expiration and encouraged them to seize the opportunity to close deals with potential customers in their pipeline. The company also extended incentives for 2023 model Mach-E and F-150 Lightning sales and leases.

General Motors anticipates that many of its electric vehicles will meet US tax credit criteria next year under stricter rules governing Chinese battery content, effective from January 1.

Volkswagen expressed cautious optimism regarding the eligibility of its Chattanooga-assembled 2024 model year ID.4 for the full $7,500 Tax Credit in the upcoming year.

Earlier announcements by Ford in December 2021 had outlined plans to significantly increase the production of its all-electric Mustang Mach-E to over 200,000 units annually by 2023, targeting North America and Europe.

(With Reuters Inputs)