Ford Executive Cautions That EV Sales May Plummet By 50% | Carscoops

      Due to changes in government policies, Ford is now tasked with deciding how to utilize its surplus EV capacity and battery factories.

      Jim Farley states that the EV market will be smaller than initially anticipated. Currently, electric vehicles make up about 10 to 12 percent of the U.S. automotive market. Ford has indicated that its EV team is continuously assessing the demand for electrified vehicles.

      The cessation of the federal EV tax credit has created uncertainty within the industry, with Ford’s chief executive warning of significant repercussions. Jim Farley believes that without the $7,500 incentive, the demand for electric vehicles in the U.S. could plummet, potentially leading to a 50% drop in sales. This serves as a stark reminder of the credit's influence on America's transition to electrification.

      In comments made at the automaker’s “Ford Pro Accelerate” event in Detroit, Farley suggested that EVs may soon account for only 5 percent of the overall U.S. automotive market, a figure last observed in 2022, and significantly below the expected 10 to 12 percent share for this month. This forecast suggests a more subdued future for electric vehicle adoption than many in the industry had predicted.

      A Declining Market?

      “I believe it will be a dynamic industry, but it will be much smaller than we anticipated, especially with the regulatory changes regarding tailpipe emissions and the elimination of the $7,500 consumer incentive,” Farley stated. “We’ll know more within a month. I wouldn’t be surprised if EV sales in the U.S. drop to 5%.”

      Farley mentioned that Ford’s Model e team is constantly evaluating the demand for electrified vehicles. The automaker will also need to revise its plans and determine how to effectively utilize its surplus EV capacity and battery production facilities.

      Adjusting to New Regulations

      “We’ll meet the demand, but it will increase pressure, as we were operating under a predictable policy for four years,” Farley remarked. “Now that the policy has changed, we all need to adapt, which I believe will benefit the country, but it will add an additional level of stress.”

      During the same event, Farley acknowledged that Ford’s customers are not keen on purchasing high-priced electric vehicles. Consequently, the automaker will need to focus on producing more affordable EVs, but the absence of the tax credit makes this task significantly more challenging.

      “Customers are not drawn to $75,000 electric vehicles,” the Ford CEO noted. “They may find them intriguing—they're fast, efficient, and don't require trips to the gas station—but they are still too costly.”