Ford Motor Co. CEO Jim Farley stated new federal electrical automobile tax credit created by the Inflation Discount Act ought to have a “wide selection of constructive impacts” for the automaker because it ramps up manufacturing.

“What’s not but clear is the diploma to which the IRA will drive buyer demand versus offsetting our EV investments and progress,” Farley stated throughout Ford’s third-quarter earnings name Wednesday.

The corporate plans to reap the benefits of credit associated to battery manufacturing, manufacturing and retail automobile gross sales, however Farley stated he sees an particularly necessary profit for its Ford Professional industrial enterprise.

The Inflation Discount Act, signed into regulation by President Joe Biden this summer time, will add a tax credit score of as much as $7,500 for industrial EVs, with no restrictions on battery sourcing or manufacturing, that’s accessible to metropolis governments and different fleet operators. Ford estimates that 55 p.c to 65 p.c of its industrial prospects will be capable to declare that credit score subsequent 12 months on its F-150 Lightning Professional pickups and E-Transit vans.

“I feel this may assist our profitability fairly a bit subsequent 12 months,” Farley stated. “Having nearly 65 p.c of our prospects qualify, together with native municipalities? It is a recreation changer for our demand.”

Ford already is a phase chief in industrial automobile gross sales and created the Ford Professional enterprise unit in 2021 to additional bolster that enterprise. The E-Transit, which went on sale earlier this 12 months, already owns 90 p.c of the fledgling EV van phase, Ford says.

Farley stated the addition of the industrial tax credit score might spur demand from enterprise homeowners who’ve been on the fence concerning the change to EVs. The one draw back, he stated, is that the approaching credit score might dampen gross sales by means of the rest of this 12 months.

“The tough half for us operationally is what can we do between now and the top of the 12 months?” Farley stated. “We’ve got lots of prospects who’re going to attend till subsequent 12 months to order a Lightning Professional or an E-Transit.”

On the retail facet of its enterprise, Ford’s Lightning and Mustang Mach-E are eligible for a tax credit score, however the eligibility necessities change subsequent 12 months when new battery sourcing guidelines and different restrictions take impact.

“Subsequent 12 months, we imagine we’ll meet the $3,750 vital supplies credit score requirement on sure Mustang Mach-E and Lightning fashions,” Farley stated, with out offering specifics. “In 2024, the foundations will additional prohibit the credit score, so we imagine it is a pretty degree taking part in discipline proper now for all OEMs.”

Farley stated the biggest affect to Ford might come from a brand new battery manufacturing tax credit score of about $45 per kilowatt hour beginning subsequent 12 months. He stated that, Ford estimates a mixed accessible tax credit score of greater than $7 billion from 2023 to 2026 with a “giant step-up in annual credit” beginning in 2027 as its joint-venture battery vegetation ramp as much as full manufacturing.