Ford stops letting customers buy EVs at lease end

Ford Motor Co. has stopped allowing customers in most states to purchase its electric vehicles at the end of a lease, a policy it says will help manage EV battery recycling.

The rule applies to leases that began June 15 or later in 38 states. Ford plans to update lease agreements in the remaining 12 states to reflect the policy by the end of the year.

In a statement, Ford Credit said customers who lease an F-150 Lightning, Mustang Mach-E or E-Transit must return the vehicle when the contract is up and can then renew their lease with a new vehicle if they choose.

“Ford wants to make electric vehicles more sustainable, drive down the cost for batteries, and ultimately help make electric vehicles accessible and affordable for more Americans,” a Ford Credit spokeswoman said in a statement. “Ford’s battery strategy includes recycling and localizing battery production, and Ford Credit’s plan for EV leasing enables customers to replace their vehicles with the newest model at lease end while keeping the vehicle in the Ford network longer so Ford can better manage battery recycling and materials.”

CarsDirect first reported the policy change.

The automaker has taken steps recently to bolster its supply of batteries, which CEO Jim Farley has said is critical to its future success. Ford aims to build 600,000 EVs globally by the end of 2023 and 2 million by 2026.

“The issue is batteries,” Farley told CNBC late last year. “That’s what we have to solve.”

Ford last year struck a deal with battery recycling company Redwood Materials to eliminate waste and eventually reuse components from EVs. The automaker in April signed a preliminary deal to buy lithium from a Lake Resources facility in Argentina.

“Ford is working really hard right now on the right deals to secure all that battery capacity and fill it up with raw material,” Farley said in February.