If the incoming Trump administration eliminates $7,500 federal tax credits for electric vehicles, that would mean the end of popular leases that allow U.S. consumers to sidestep restrictions on which EV models qualify for incentives.

President-elect Donald Trump’s transition team intends to revoke the tax credit for purchasing an EV, Reuters reported last week. Whether and when that could happen remains uncertain. A companion EV-leasing credit in the 2022 Inflation Reduction Act would have to be dealt with separately but is widely seen as vulnerable. So people hoping to acquire an electric car might want to act soon.

“If you’re on the fence, right now is probably going to be one of your better opportunities to buy or lease an EV at a good price, at least for a few years,” said Chris Harto, a senior policy analyst at Consumer Reports. “Some of the cheapest ways to get into an electric vehicle over the past year has been an EV lease.”

Megan Varner/Bloomberg

In October, leases accounted for 79% of EV sales at dealerships, according to Jessica Caldwell, executive director of insights at automotive research firm Edmunds.com Inc. “When you see the tax credit applied to a three-year lease combined with some of the generous incentives the automakers themselves are offering, the EV deals are pretty compelling,” she said.

This week, for instance, you can drive home a luxury electric BMW i4 for $460 a month, about the same price as leasing a middle-of-the-road gasoline Toyota Camry. Hyundai, meanwhile, is currently offering its sporty electric Ioniq 5 for $199 a month on a two-year lease.

Edmunds’ numbers don’t include automakers such as Tesla and Rivian that sell directly to consumers and that don’t release the percentage of their customers who opt for leases. 

The IRA limits the purchase tax credit to electric vehicles assembled in North America and requires a percentage of battery components and critical minerals to originate there or in countries that have signed a free-trade agreement with the U.S.

But the sticker price can’t exceed $55,000 for a car or $80,000 for an SUV, and only households earning up to $300,000 annually and individuals making up to $150,000 can claim the tax credit. EVs such as the Chevrolet Equinox, Honda Prologue and Volkswagen ID.4 get the green light, but if buyers have their eye on models like the Hyundai Ioniq 5 or a Polestar 2 — which aren’t assembled in North America and don’t meet the battery and critical mineral requirements — they’re out of luck.

Unless they lease. Those restrictions don’t apply to the federal government’s commercial clean vehicle credit program, which allows fleet owners like automakers’ finance arms to claim the tax credit. That lets manufacturers entice customers by passing on the $7,500 savings in the form of lower lease payments.

Caldwell said leasing is also attractive to prospective EV drivers worried about the risk of purchasing a $50,000 car only to have its technology become outdated while still owing payments. “We’ve also seen pretty heavy depreciation for electric vehicles, so if you lease you’re not left holding the bag if the vehicle declines rapidly in value after three years,” she said.

If the lease loophole is closed, “EVs are going to have to sell on their own merit, which we know is always tough when there is a new technology and people still have concerns about battery longevity, range and infrastructure,” said Caldwell.

Congress would need to pass legislation to kill the EV tax credits, according to Romany Webb, deputy director of the Sabin Center for Climate Change Law at Columbia University. But absent Congressional action, she said Trump could order the IRS to revamp its guidance on how they are used.

The agency “could, for example, revise the list of vehicles that are eligible for the tax credits or add new procedures for claiming the credits,” said Webb. “That could make it more practically challenging for people to take advantage of the credits and, generally, introduce a lot of uncertainty and confusion that could make people less willing to purchase or lease EVs.”

Consumers aren’t the only ones who would feel the impact if the credits are tightened or repealed. “These tax credits are for consumers, but they’re also really for automakers so that they can scale up the production of electric vehicles and can remain competitive,” said Harto. “So while repealing the tax credit will hurt consumers, it probably hurts automakers even more.”

The International Financial Reporting Standards Foundation and its International Sustainability Standards Board released a new sustainability guide Tuesday.

The guide can help companies identify and disclose material information about sustainability-related risks and opportunities that could reasonably be expected to affect their cash flows, their access to finance or cost of capital over the short, medium or long term.

Investors and global capital markets are increasingly requesting such information to inform investment decision making. The guide focuses on helping companies understand how the concept of sustainability-related risks and opportunities is described in IFRS S1, the ISSB’s sustainability disclosure standard, including how these can come from a company’s dependencies and impacts. Those dependencies and impacts on resources and relationships can lead to sustainability-related risks and opportunities that could reasonably be expected to affect its prospects.

The guide discusses how companies applying ISSB standards can benefit from the process they might already follow in making materiality judgments when preparing financial statements, particularly when applying IFRS accounting standards. The IFRS Foundation oversees both the ISSB and the International Accounting Standards Board.

The guide describes the process a company can follow which is closely aligned with the four-step process illustrated in the IASB’s IFRS Practice Statement 2: Making Materiality Judgments. As a result, although the ISSB standards can be used with any generally accepted accounting principles, those companies already applying IFRS accounting standards — in over 140 jurisdictions worldwide — as well as those such as in the U.S. where there is strong alignment with a focus on providing material information to investors, will be particularly well prepared to apply the concept of materiality using ISSB standards.

The guide also discusses some of the considerations a company might make to drive connectivity between sustainability-related financial disclosures and a company’s financial statements. For those looking to meet the information needs of a wider set of stakeholders, it provides considerations for those applying ISSB standards alongside European Sustainability Reporting Standards or Global Reporting Initiative standards.

Super Micro Computer Inc. shares jumped as much as 27% after the company hired a new auditor and filed a plan to come into compliance with Nasdaq listing requirements.

The server maker said it submitted a plan to the Nasdaq exchange for filing its 10-K financial disclosure report delayed in August. The company also announced that it appointed BDO USA as its independent auditor, effective immediately. 

“In its compliance plan to Nasdaq, the company indicated that it believes that it will be able to complete its annual report on Form 10-K for the year ended June 30, 2024, and its quarterly report on 10-Q for the fiscal quarter ended Sept. 30, 2024, and become current with its periodic reports within the discretionary period available to the Nasdaq staff to grant,” Super Micro said Monday in a statement. 

David Paul Morris/Bloomberg

If Super Micro’s plan is accepted by the exchange, its new deadline for the document will likely be pushed to February. It will be able to stay listed on the Nasdaq until a final decision about its compliance is made. If a plan isn’t approved, the company can appeal the decision.

Super Micro’s previous auditor, Ernst & Young LLP, resigned in October, citing concerns over the company’s transparency and governance. Ernst & Young is one of the Big Four accounting firms, the auditors that vet the books of the world’s largest companies. BDO USA is the sixth-largest auditor by revenue, according to Inside Public Accounting. The firm has only one other S&P 500 company as a client, according to data compiled by Bloomberg. 

Finding an auditor is a “big step for them,” even if it isn’t one of the Big Four firms, Matt Bryson, an analyst at Wedbush, said in an interview. “This is a positive step in terms of putting a plan forth in front of Nasdaq, and, at least from their perspective, hopefully being able to file their financials and put these problems to bed.” 

Having a new auditor and a plan to regain compliance with Nasdaq’s listing rules is the latest update in a tumultuous few months for Super Micro, which had gained favor with investors earlier this year as a potential beneficiary of the demand for artificial intelligence services. The San Jose, California-based company delayed filing its annual 10-K following a damaging report from short seller Hindenburg Research, and last week said it would be late with quarterly reports. 

Super Micro is also facing a U.S. Department of Justice probe. The shares had tumbled more than 80% from a peak in March through Monday’s close.

The company has gone through a delisting and relisting process before. In 2019, the shares were taken off the Nasdaq exchange after Super Micro failed to meet deadlines to file a 10-K and several quarterly reports. The company received approval to rejoin the exchange in 2020, and in the same year paid a $17.5 million penalty to resolve an investigation by the US Securities and Exchange Commission. Super Micro didn’t admit to or deny the regulator’s allegations as part of its settlement. 

Some stock bulls are reiterating their investment case for the one-time Wall Street AI darling. 

“We take the view that regardless of its regulatory woes (now receding in the rear-view mirror), SMCI maintains its leadership in the massive, scalable AI data center market for liquid-cooled server racks,” Lynx Equity Strategy analyst KC Rajkumar said. 

“SMCI has a leadership position in the rapidly expanding liquid-cooled GPU server data center market, a position it is unlikely to give up any time soon,” Rajkumar said.