Ahead of the passage of the $700 billion Inflation Reduction Act, Ford Motor Company and General Motors raised the prices of their electric vehicles, eliminating the potential benefit of the bill’s $7,500 electric vehicle tax credit.
Ford announced last week it would raise the prices of most of its F-150 Lightning electric vehicles between $6,000 and $8,500, and General Motors increased the price of its electric Hummer by $6,250.
The two auto companies blamed higher material costs for the increase in prices.
“Due to significant material cost increases and other factors, Ford has adjusted MSRP starting with the opening of the next wave of F-150 Lightning orders,” Ford explained.
The Inflation Reduction Act offers a tax credit up to $7,500 for new electric vehicles, and $4,000 for purchasing used electric vehicles, and has a cap of $80,000 to receive a tax credit.
Although Americans can still use the tax credit to offset the cost of the purchase of an electric vehicle, an electric vehicle may remain too expensive for many Americans reeling from the cost of inflation.
Matt Ybarra, a spokesman for GM, said that the rise in prices has nothing to do with the Inflation Reduction Act.
“The pricing update is completely unrelated to the Inflation Reduction Act and the announcement was made well before that legislation was introduced,” Ybarra explained. “In mid-June, GMC announced that new GMC HUMMER EV reservations placed on/after June 18th would see an increase of $6,250 to the base MSRP due to the increase in the price of commodity parts, technology and logistics.”
Martin Günsberg, a spokesperson for Ford, said, “We’ve recently adjusted MSRP for both EV and ICE F-150 models,” Ford spokesperson told FOX Business in an email. “We announced F-150 Lightning pricing in May of 2021 — 15 months ago — and since then, inflation and commodity costs have continued to increase, leading to this recent adjustment for the next model year.”