Most electric vehicles currently for sale do not fully qualify for the federal EV tax credit due to their manufacturing location. However, by leasing these vehicles, drivers can save thousands of dollars. To take advantage of this, Hyundai, Kia, and Ford are increasing their EV leasing options to lower pricing and boost sales.

Leasing falls under commercial business and is therefore exempt from North American manufacturing regulations, allowing more EV models to be leased. As long as companies pass on the tax credit savings to consumers, leasing can be more affordable, saving drivers up to $222 per month.

Edmunds reports that 37% of EVs bought in April were leased, up from 25% in the first quarter and 13% last year. This loophole also allows automakers to target more affluent customers and level the playing field against full tax credit competitors.

Hyundai Ioniq 5’s leasing increased from 2% to over 30% in April by offering a $499/month deal, which is lower than the $577 industry average. Kia and Ford are also expected to increase their EV leasing from below 15% to 40%.

Ford’s credit arm is working on a leasing strategy for their EVs, including the Mustang Mach-E, while GM is not changing its current leasing strategy. EV leasing provides a temporary option for customers to take advantage of new technology before committing, possibly leading to brand loyalty and repeat purchases.

Leasing can be an attractive option, especially for those dipping their toes into the emerging EV industry. With costs and regulations changing rapidly, leasing can provide an affordable way to experience the benefits of owning an EV without making a long-term commitment.