Ford Motor Company CEO Jim Farley forecasts a significant reduction in electric vehicle (EV) sales following the expiration of federal tax credits. He predicts demand could drop by as much as 50% next month.
Decline in EV Sales After Tax Credit Expiry
Farley indicated that the market share for all-electric vehicles may fall from an anticipated record of 10-12% in September to about 5% in October 2025. This shift is linked to the end of the federal EV incentives, which have provided up to $7,500 for buyers.
Impact of Policy Changes
The expiration of these incentives is part of the “One Big Beautiful Bill Act,” enacted during the Trump administration. Farley noted that while the EV industry remains vibrant, it will be considerably smaller than previously anticipated due to recent policy changes regarding tailpipe emissions.
- Current EV market share: 10-12%
- Projected market share post-incentives: 5%
- Federal EV tax credit amount: Up to $7,500
Consumer Preferences Shift
Farley observed that consumers are gravitating towards hybrid vehicles rather than fully electric options at this time. He stated that while buyers are intrigued by electric models, many consider them too costly. For example, the Ford F-150 Lightning can exceed $90,000.
Sales Trends and Forecasts
Despite the projected decline, Cox Automotive reports that EV sales reached 410,000 in the third quarter of 2025, marking a 21% increase from the previous year. This quarter saw the highest number of EV sales to date, driven by consumer interest before the end of federal incentives.
Analysts anticipate that many potential buyers expedited their EV purchases to benefit from the existing tax credits before their expiration.
Future Adaptations for Ford
Farley emphasized that the automotive industry, including Ford, must adapt to the new regulatory landscape. The unexpected policy changes pose challenges, particularly concerning the company’s battery production capacity.
He believes that while adjustments will be necessary, they could ultimately benefit the broader economy. “We all have to make adjustments,” he added during the Ford Pro Accelerate event, which focused on the importance of skilled labor and education in the industry.
