New York, November 20, 2025
Ford CEO Jim Farley has urged policymakers not to impose taxes on electric vehicles as the U.S. federal government ended its EV tax credit program on October 1, 2025, raising concerns about the future of EV adoption and market stability.
Federal EV Tax Credit Expiry and Policy Shift
As of October 1, 2025, the federal tax credit program designed to incentivize electric vehicle purchases has officially expired. Previously offering up to $7,500 for new EVs and $4,000 for used ones, the credit was eliminated under legislation known as the “One Big Beautiful Bill Act,” signed by President Donald Trump in July 2025. This policy change aligns with a broader governmental shift away from aggressive climate initiatives, including the rollback of emissions standards.
Industry Response: Ford CEO’s Warning
Jim Farley, CEO of Ford Motor Company, has publicly criticized any new proposals to tax electric vehicles during this period of transition. Farley emphasized that taxing EVs now would hinder their adoption, noting that such measures come at a critical moment when the market is losing a vital financial incentive. He forecasted that the U.S. EV market share could decline sharply from an estimated 10–12% down to as low as 5% without these credits, threatening the progress made in electrification.
Market and Consumer Impact
The removal of tax incentives is expected to disproportionately affect mainstream consumers, who often depend on subsidies to offset the higher upfront costs of EVs. Without these federal credits, electric vehicles face increased competition from traditional gas-powered cars, potentially slowing the shift toward cleaner transportation solutions. Although automakers like Ford and General Motors have introduced temporary lease incentives through their financing arms, these are considered stopgap measures and unlikely to sustain market momentum in the long term.
Automaker Strategy and Industry Outlook
In response to these developments, Ford is adjusting its production strategies by retooling factories to prioritize more affordable EV and hybrid models. However, Farley acknowledged that the policy uncertainty creates significant challenges for long-term planning and innovation investment. Automakers are now focusing on cost-effective models and adopting a slower pace of electrification to mitigate risks associated with the evolving regulatory landscape.
The overall outlook suggests a contraction of the EV market, undermining earlier optimistic projections. The federal tax credit’s expiration, coupled with potential new taxation proposals, threatens to erode consumer interest and stall technological advancement in the sector.
As the U.S. electric vehicle market enters this new phase, the interplay between policy decisions and industry strategy will be crucial in shaping the future of clean mobility. Ford’s call for a pause on EV taxation highlights the delicate balance between fostering innovation and navigating shifting political priorities.