The electric-vehicle tax credit might be dead, but some U.S. automakers had a plan to keep it alive. Well, had. Just before it expired, General Motors announced that it managed to find a clever way to preserve the discounts to customers who lease EVs after Sept. 30: Put the cars into service by making a down payment to the dealerships themselves.
But it turns out some of America’s elected officials don’t take too kindly to workarounds, so now that plan is off the table.
Welcome back to Critical Materials, your daily roundup for all things electric and tech in the automotive space. Also on deck: Ford will pull back on Lightning production, and the federal government threatens to pull back over a billion dollars in EV manufacturing grants from GM and Stellantis. Let’s jump in.
30%: Ford Expected To Idle F-150 Lightning Production
The Rouge Electric Vehicle Center (REVC) will idle F-150 Lightning production for at least a week, according to a memo sent to workers shared with Reuters. And while demand for electric vehicles is expected to drop this week, it’s not the reason Ford is scaling back production.
A late-night fire tore through part of the Novelis aluminum plant in Oswego, New York, last month. The damage was so extensive that a large portion of the plant is expected to remain out of commission into 2026, which means that many automakers—Ford included—are expected to face a supply crunch over the next few months. And because Ford makes its F-Series pickup bodies from aluminum (and because those pickups are one of America’s best-selling vehicles), it must now choose what production to scale back in order to keep cranking out high-margin products at volume.
Unfortunately, the F-150 Lightning will fall victim to the supply crunch, at least until Ford can work out how to mitigate the problem.
The Wall Street Journal covered just how impactful the fire is expected to be for Ford:
Ford is the biggest user of the plant. Its F-150 pickup, the top-selling vehicle in the U.S. and the automaker’s main profit driver, is one of the industry’s biggest users of aluminum. The setback is severe enough that Ford will likely flag potential implications to investors when it discloses quarterly financial results later this month, according to people familiar with the matter.
Ford shares sank in morning trading by more than 7% on news of the potential disruption.
“This represents a serious question for the production of F-150 because that’s the aluminum that comes out of Oswego,” said Kaustubh Chandorkar, an aluminum-industry analyst. Ford switched the F-150’s exterior to aluminum from steel a decade ago.
Confirmation of Ford’s production line shutdown next week was made by Reuters, which viewed a memo written by Dearborn Truck UAW Chairman Nick Kottalis. The memo stated that REVC will be off next week, related to the Novelis fire, but did not address the total anticipated impact on production.
Ford isn’t alone in its reliance on the metal supplier. General Motors, Stellantis, Toyota, and more are all customers. In fact, Novelis supplies nearly half of all sheet metal used by U.S. car makers. However, industry analysts expect that Ford will be hit the hardest out of any automaker with a U.S. production line and is estimated to lose up to a whopping $1 billion from its bottom line.
“We believe this is largely a Ford issue,” wrote Chris McNally, Head of Global Auto and Mobility Research at Evercore ISI, in a note on the matter. McNally went on to estimate that the firm expects Ford to take an earnings hit of between $500 million and $1 billion over the supply issue.
Admittedly, if Ford had to choose between cutting down on the F-150 Lightning and gas models, it makes sense to ramp down on the electric model. Automotive Market Predicted to Shift Towards ICE Vehicles
With Ford’s ICE truck outselling its battery-powered variant and GM backtracking on its EV tax credit extension plan, the automotive market in the United States is expected to see a significant shift towards internal combustion engine (ICE) vehicles in the coming months. The recent fire at an aluminum plant that supplies Ford has also raised concerns about potential disruptions in production.
According to reports from the Detroit Free Press, Ford is working closely with its aluminum supplier, Novelis, to explore alternatives and minimize any potential disruptions in production. The extent of the shutdown and its impact on total production remains unclear at this time.
On the other hand, GM’s decision to self-fund lease incentives for EVs until the end of the month, instead of claiming the tax credit, has sparked controversy. U.S. Sen. Bernie Moreno criticized certain car companies for attempting to take advantage of the tax credit loophole and called for action to address the violation of Congressional intent.
While GM has decided not to claim the tax credit, Ford has not yet responded to inquiries about its plans regarding the EV market. With the EV tax credit set to expire, the overall EV market is expected to slow down significantly in the near future. GM has warned consumers not to expect excessive discounts after the tax credit ends, although lease incentives will still be available until the end of the month.
Overall, the automotive market in the U.S. is predicted to see a shift towards ICE vehicles, with Ford’s ICE truck leading the way in sales and GM’s decision to forego the EV tax credit extension setting a precedent for other automakers. The future of EVs in the U.S. remains uncertain, but for now, it seems that ICE vehicles are regaining the spotlight in the automotive industry.
General Motors and Stellantis are facing the possibility of losing nearly $1.1 billion in federal grant funding awarded to them by the U.S. Department of Energy. The funds were intended to support the retooling of their factories to produce electric vehicles, but now the money could be taken away as part of a larger cancellation of Congressionally-mandated funding for energy and manufacturing projects.
According to a report from Automotive News, a total of $12 billion in grants could be affected, in addition to the cancellation of $8 billion for various clean energy-related needs. This move comes as the partial government shutdown persists, and the Department of Energy is reevaluating the projects that were awarded funding.
The potential cancellations include $500 million awarded to GM to convert its Lansing Grand River Assembly plant in Michigan to produce electric vehicles, $335 million for Stellantis to convert the Belvidere Assembly Plant in Illinois to make midsize electric pickups, and $250 million for Stellantis to convert its Indiana Transmission Plant in Kokomo to produce EV components.
For GM, this means that the $500 million earmarked for the Lansing Grand River plant could be at risk. The company had planned to use the funds as part of a $1.25 billion investment in retooling the factory to build EVs by 2024. Stellantis, on the other hand, had allocated $334.8 million to revive the Belvidere plant and $250 million for the Indiana transmission plant as part of a $1.5 billion investment in EV production.
No final decision has been made yet, but the potential loss of funding threatens around 2,900 direct jobs and supports over 15,000 other workers in the U.S. auto industry. The impact of these cancellations could be significant for both automakers and the broader industry.
It remains to be seen how this situation will play out and what the implications will be for GM, Stellantis, and the EV industry as a whole. The fate of the federal grant funding hangs in the balance as the Department of Energy reevaluates its priorities and funding allocations in the midst of ongoing political and economic challenges.
With the increasing popularity of electric vehicles (EVs) and the push towards a more sustainable future, more and more affordable options are becoming available to consumers. One of the main barriers to widespread EV adoption has been the high cost of entry, with many new EVs priced well above the average transaction price for new cars. However, recent developments in the EV market are changing that narrative.
The 2026 Nissan Leaf, for example, offers a starting price of $29,990 with an impressive range of 303 miles. This makes it not only a more affordable option compared to traditional gas-powered vehicles but also competitive in terms of range. Similarly, the newly announced Chevy Bolt LT comes in at $28,995 with a range of 255 miles, further expanding the options for budget-conscious consumers looking to make the switch to an EV.
Tesla, a leader in the EV market, has also made strides in offering more affordable options. The new Model 3 Standard starts at $36,990 and boasts an impressive range of 321 miles. This combination of affordability and range makes it an attractive option for those looking to dip their toes into the world of electric vehicles.
But it’s not just the newer players in the market that are offering affordable EV options. Established brands like Hyundai, Chevy, and Toyota are also stepping up with models like the Hyundai Kona, Chevy Equinox, and Toyota bZ, all priced under $40,000 with respectable ranges.
These developments signal a shift in the EV market towards greater accessibility and affordability. While EVs may not yet be considered “cheap” in the traditional sense, the increasing number of options available under $40,000 is certainly a step in the right direction. As technology continues to advance and production costs decrease, we can expect to see even more affordable EV options in the near future. The days of high-priced electric vehicles may soon be behind us, paving the way for a more sustainable and cost-effective transportation future.