Oct. 4, 2025 | Weekend Drive: End of EV tax credit fuels sales; government shutdown

This podcast is brought to you by Proton dealership IT experts in dealership cybersecurity and IT management. Interested in a free cybersecurity compliance or IT consultation? Visit ProtonTex.com. That's PRO-T-O-N-T-E-C-H-S.com. Welcome to this weekend drive edition of Daily Drive for the first week in October 2025. I'm Kevin Walker in Las Vegas. We're breaking down some of the biggest stories in the auto industry.

We're breaking down some of the biggest stories in the auto industry from the past week and looking forward to what to store in the days ahead. Joining me today are Michael Martinez, who covers Ford and the UAW for us at Automotive News. As always, Mike, welcome back to the weekend drive. Thanks for having me.

For the first time ever, a man that I deal with on a weekly basis and none of you know this. Greg Lassen is digital and mobile editor at our sibling publication Automotive News Canada and the host of the Great Automotive News Canada Podcast, which you can find every Friday wherever you get your podcasts. Greg, it is so great to have you here on Weekend Drive.

Good to be here. Thanks for having me.

All right guys, so let's get started. This week's news was dominated by one big story, the end of federal EV tax credits in the US, and the impact on all of the sales results that have been coming in for September and the third quarter.

Mike, before we get into US sales, what are Ford and other automakers with electric vehicle portfolios saying and planning now that the federal EV tax credit is gone?

Well, at least a few of them are planning to continue that tax credit in effect through at least the end of this year. We saw Ford and GM and now it's basically the same plan for their financing arms to buy up remaining dealer EV inventory and to get the tax credits themselves that way by doing it before September 30.

Then that way they would continue to offer the discount to customers if they lease through those financing arms through the end of the year. I think Hyundai also announced it was cutting the price of one of its EVs and said it would continue to offer that discount on the 25 model years.

So I think the automakers realize this is an important incentive that has been there for years that has helped speed up the adoption, particularly of these higher priced EVs.

So without it, there's some worry. Ford CEO Jim Farley is essentially expecting catastrophe. He expects the EV market to be halved once this tax credit goes away starting this month. He said he thinks it could fall from around 10, 12% today of the market to 5%. That's pretty significant.

So I think the automakers are very conscious of this and I think they're realizing that they maybe need to speed up development of more lower priced EVs.

That's been an issue for years now. Everybody's been striving to bring those battery costs down, but this tax credit going away adds even more fuel to the fire so to speak to get cheaper EVs in hands of customers.

And Greg, Canada ended its main EV tax credit in March of this year. What has happened there and do you think it's a good indicator of what could happen to the US EV market in the coming months?

Yeah, this is one of the few times that I actually follow the United States trend. Canada usually is following you guys.

But now I'm looking at it going, hey, I've been there, done that. I've covered this. When they took away the $5,000 EV tax credit in Canada, sales absolutely tanked.

The latest data July sales down 33.7% from the same month in 2024 and that marked the sixth consecutive month of 30 plus percentage declines year over year on a monthly basis.

I mean, people just simply stopped buying EVs when the $5,000 tax credit went away because the price gap is too big. Michael nailed it. They're just are not affordable middle class electric vehicles right now.

I think the latest data out of the United States shows that on average EVs are $9,000 more than an internal combustion engine.

In Canada, the government ran its own study this year and found that cars are $6,000 more expensive if they're equipped with an internal combustion engine.

SUVs and trucks on average $11,000 more and our tax credit was only $5,000.

And so when you take that $5,000 away, people just stop buying and they turn elsewhere. They look for hybrids and cheaper internal combustion engine vehicles.

So you guys in America are in for a real wake up call into what that $7,500 US tax credit meant to sales.

You are going to see declines and they're going to be huge.

Well, Greg, you wrote this week about how Ford's Canadian EV market has surged while Teslas has been tanking.

What has been propelling Ford's EV success in Canada?

It's the Machee on a brand by brand basis. The Machee is developed essentially to compete with the Model Y.

They're very similar in size, shape, build, range, all of that stuff.

And Canadians who have shied away from Tesla for various reasons, whether it is because they don't like Elon Musk.

And that's a global trend that we saw earlier this year because of his political leanings and affiliation with Donald Trump.

A lot of Canadians were turned off by that.

There are now about 120 zero emissions vehicles in the Canadian market.

That is nearly triple what was available even in 2020 when Tesla was the dominant player.

So when you add more product to the mix and more competition and more sort of options,

Canadians start to shop around and they're looking for something with value.

There was a time when Tesla was importing their vehicles from China.

That turned off some people. They had to reroute and start manufacturing in America and send them up here.

So really this has been a battle between the Machee and a bunch of Tesla models.

And Machee is winning out right now.

Now Ford did have huge discounts on the Machee earlier this year, especially when the rebates went away.

Michael noted that some automakers also started picking up the tab for those tax credits.

The same thing happening in Canada were a few automakers that sort of floated the $5,000 tax credit until everything was out of the system.

So all those things are working hand in hand to help Ford gain market share and really eat away at Tesla's market share.

Tesla is just they've had that publicity.

They've had some controversy about where their vehicles are made and they have more competition.

You know, I'm not wanting to say I told you so, but I've been saying for years this is my exact quote to some executives in the industry.

There's going to come a time when Ford will eat Tesla's lunch and in Canada Ford is now eating Tesla's lunch.

Mike, what are your thoughts?

Yeah, well, I'd say it's almost similar to what's happening in the US.

You've seen Machee sales jump pretty significantly this year again driven by customers trying to take advantage of that tax credit.

Ford has put discounts on it here in the US too.

They're offering free home charging. They just extended that promotion again.

I think this is the third or fourth time now.

And you know, folks like the packaging.

They like the fact that it's a Mustang even though the enthusiast still grape about that.

So yeah, I think a lot of a lot of similar attributes both sides of the border here.

Well, Mike, the rush to get an EV before those credits expire was a shot in the arm for US sales in September and the third quarter.

What are your big takeaways from this round of results and how worried do you think automakers should be about the rest of the year?

I think they should be really worried.

I think the big takeaway, like you said, is the pull ahead EV sales.

I think when you dig a little deeper, you see hybrids have also been performing well.

So maybe there's a glimmer of hope for automakers that if customers are going to go away from EVs,

they'll at least step into hybrids, companies like Ford or GM or boosting their hybrid offerings.

Also, big trucks and SUVs continue to sell well for some companies.

But I think the big takeaway here is that the fourth quarter is going to be difficult to continue these gains.

Not just in the third quarter, but remember earlier in the year, we saw a big boost from tariffs.

Everybody was rushing to try to get their lower price models because everybody expected prices to surge once the tariffs went into effect.

So sort of first quarter started the second quarter.

We saw a lot of pull ahead sales, third quarter. We saw a lot of pull ahead sales.

That's not leaving much for Q4. So anybody who's banking on a strong end to the years, probably going to be sorely disappointed.

And Greg, September sales are finalized in Canada, but not third quarter sales.

What do you know so far about your market and what do analysts expect?

Yeah, it's a similar story in Canada to what Michael just described in America.

Sales for September up almost 4%.

That's an estimate because not all automakers report on a monthly basis here.

Many are quarterly year to date.

The estimate is that they're up 4.3%.

But same thing.

There was a pull ahead in EV sales.

There was a pull ahead in tariff sales.

I mean, immediately television commercials over here had automakers saying get your vehicle before tariff pricing comes into effect.

So the consumer has been conditioned to go out and buy these vehicles now rather than wait for later.

Now auto forecast solutions and rosy automotive consultants both warn that prices are going to go up in the fourth quarter because of those tariffs mainly on 2026 models.

The other thing is they still say there's going to be about 1.8 million 1.81 million units sold in Canada.

That's a healthy number for Canada.

It's not anywhere near our records of 2.1 2 million vehicles sold before COVID.

But nobody's going to be crying over 1.8 million vehicles sold in Canada.

That's a strong number.

But most of those have come already.

I think the third quarter you're going to see a slowdown in sales because people have purchased before the tariffs kicked in.

People have purchased their EVs before the the EV incentive went away.

So they had a month, a month and a half to do so.

And then the prices are simply going to go up over the next quarter.

Everything's looking like it's going to be an increase in compact subcompact cars, compact SUVs, small SUVs because people are starting to tighten their belts a little bit and pinch their pennies a little bit in Canada.

But we'll still have 1.8 million.

Good stuff guys coming up.

We'll talk more about the week's news including how the US government shutdown could affect the auto market and Canada's decision to spend millions on US made EV chargers.

Despite the trade war.

That's next on Weekend Drive.

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Welcome back to Weekend Drive.

I'm Kellyn Walker with Michael Martinez and Greg Lason.

So Mike, our own Molly Boygon wrote this week about the likely impacts of the government shutdown on the auto market.

She noted on Wednesday's show that the biggest problem might be the EPA's ability to certify 2026 models a process that is already underway.

Are you hearing anything from Ford about this?

And do you think this could become a big problem if the shutdown drags on?

Well Jim Farley, the CEO, is speaking on CNBC the other day.

And just in general terms, he said he thought the shutdown was a bad thing.

And he hopes both sides can come together and reach some type of compromise and bipartisanship to get the government open running again.

I don't know, Kellyn, maybe I'm just an optimist, but I'm not sure that this is going to be that huge of a deal.

At least as it relates to the auto industry, maybe if it drags on a month, two months beyond that,

I don't know what the chances are of that happening, but just when it comes to EPA certification and some of this stuff, you know, let's be honest, the past few years,

the auto makers have been going through a hell of a lot in terms of parts shortages and things like that that have delayed the start of certain model years or certain trim packages.

Sometimes they've had to sit and wait with incomplete vehicles.

Yeah, you know, profits were heard a bit, but it didn't kill them at the end of the day.

So I don't know if, you know, a delay and a certification of a few weeks is going to make that big of a deal.

But obviously if the government stays shut for any extended period of time, it could get ugly.

Yeah, I remember when they were running low on those blue ovals, I remember that.

Yeah, yeah, literally the logos.

And Greg, I'm curious how Canadians view this from north of the border when it comes to the auto industry and just in general.

In general, we watch everything that goes on in the United States.

You're our closest neighbor, our biggest trading partner, longstanding relationship, the longest unguarded border on the planet.

So, you know, anything that happens in the United States is of interest to Canada, you know, America sneezes, Canada catches a cold type line.

But in this case, we're watching it more as theater, I think, than actually an economic impact.

That said, the biggest worry for the Canadian automotive industry would be the border itself.

And just to illustrate my point, my son plays baseball in Metro Detroit.

And so I was over there yesterday.

And our border was down. We were having technical issues on the commercial side of things with trucks entering Canada.

And the trucks were lined up for miles and miles equals money in the auto industry.

If those trucks aren't coming over to deliver parts for just in time delivery at assembly plants on either side of the border, that's when it becomes an issue.

Now, we know that the government has sort of said, the United States government has said, you know, the border and the border agents won't be impacted.

They still have to go to work. And so if that continues, everything is fine.

But if there's any sort of slow down there, if there's work to rule that, you know, they don't take overtime, they close more toll booths or inspection booths or run at just the bare minimum.

And anything that backs up the transport of goods and throws a monkey wrench into the logistics, that's really what the Canadian auto industry is watching. And it's mainly the parts suppliers.

Well, Greg, you wrote another really interesting story this week about the Canadian government buying almost 100 US made EV chargers despite the fact that there's a big trade war between the two countries and that Canada makes chargers as well. What's going on there?

So you're right. A 96 chargers from a Texas company called Wallbox going to be deployed across Alberta and British Columbia and Western Canada.

We have a company in Quebec flow that makes electric vehicle chargers. They're doing rather well. They actually have some US production over time as well.

And so I was sort of taking a back that the federal government was paying. I think it's about almost $5 million for these chargers.

But in looking at it, the money is coming from a program called the zero emission vehicle infrastructure program. And it does not preclude US companies from applying for funding on projects like this.

So this to me is interesting during a trade war when we were told during our spring election that our elbow should be up and we should be guarding against Americans.

And we should be really teaching Americans a lesson and how important our market is for them. And then we go out and we spend $4.7 million on EV chargers made in Texas.

You don't get much more American than Texas. Everything's bigger there. And you know, we know that Arlington is a big GM producer. And so Texas matters in the auto industry.

And it was funny that the government didn't do its due diligence and go back and sort of preclude American companies from bidding on this business, which has always sort of been what we were told as citizens and the industry even that they were going to guard against American imports.

You know, when you look at what Canada did early on when Donald Trump implemented these auto and steel tariffs, you know, we immediately tear off orange juice from Florida whiskey from Kentucky, Harley Davidson's from Wisconsin.

All of these things were targeted and one of the things that slipped through the cracks. It appears to be our EV chargers from Texas.

But the other side of that coin is that it shows how integrated this industry is and how much we need and can use each other to both countries' benefits.

I think if there is a dollar to be made and a dollar to be saved to grow the industry, I think this might illustrate that.

This is a government-run program that is helping a US business get chargers in some of the most rural parts of Canada.

So I think it's a win-win-win for everything that I just mentioned.

But it is interesting that our government who said we were going to have our elbows up as you do in the corner of a hockey ring, kind of got caught with their elbows down on this one and allowed about $5 million worth of chargers going to be installed in Alberta and DC.

Well good stuff. Greg, Mike, thank you so much for joining me.

Anytime.

Thanks, Kyle.

Well, for this weekend drive edition of Daily Drive, I'm Kellyn Walker.

Thanks to automotive news executive producer Jake Nier for his help on today's podcast.

You can get the latest news on the EV market, sales results, and everything happening in the auto industry at autonews.com.

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Oct. 4, 2025 | Weekend Drive: End of EV tax credit fuels sales; government shutdown

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