New York, November 20, 2025
Ford CEO Jim Farley has warned against imposing taxes on electric vehicles (EVs) as the U.S. federal government ended its EV tax credit program on October 1, 2025, a decision that threatens to shrink the EV market and disrupt industry growth.
Federal EV Tax Credit Program Ends
The federal tax credit for EV buyers, which offered up to $7,500 for new electric vehicles and $4,000 for used models, expired on September 30, 2025, following the signing of the “One Big Beautiful Bill Act” by President Donald Trump in July. This policy shift reverses over a decade of federal incentives aimed at promoting electrification.
Automakers including Ford and General Motors have temporarily responded by extending lease discounts through financing operations that purchase existing dealer inventories. However, these workarounds are stopgap measures and are not expected to replace the influence of the federal credit in the long term.
Projected Market Impact
Jim Farley, Ford’s CEO, projects a steep decline in EV sales, estimating that the market share could halve from its current 10–12% down to 5% following the credit’s removal. This downturn threatens to stall years of progress in the adoption of electric vehicles in the United States.
Without federal incentives, the high cost of EVs, especially premium models such as the Ford F-150 Lightning, becomes a more significant barrier for consumers. This pricing pressure is shifting buyers toward hybrid alternatives, which remain more affordable without subsidies.
Policy Direction and Industry Shift
The recent federal policy changes coincide with a broader pivot under the Trump administration toward supporting internal combustion engine vehicles. Emissions regulations are being relaxed, and the federal government’s stance favors gasoline-powered vehicles over electric alternatives.
In response, Ford has announced a delay in launching new EV models until 2028 and is focusing on developing more affordable, mass-market electric trucks. The company is also retooling its battery manufacturing plants and vehicle assembly lines to accommodate anticipated lower demand for EVs.
Industry Outlook and Ford’s Strategic Response
The EV industry in the United States remains active but faces a significant slowdown. Investment plans tied to battery production and EV capacity are under increasing pressure due to the uncertain market conditions.
Farley emphasized the critical timing of policy decisions: “Now is not the time to tax electric vehicles.” His statement reflects growing concern that adding financial burdens to EVs risks undermining innovation and consumer adoption at a pivotal moment.
Looking Ahead
In the wake of the federal tax credit’s expiration, some states may implement their incentives or manufacturers might increase rebates to counterbalance the policy gap. Automakers are expected to prioritize affordability and continue promoting hybrid models as the market adjusts.
While electrification at a global level remains an ongoing trend, the U.S. market faces a more uncertain and slower path forward given recent regulatory and fiscal policy shifts. Stakeholders across the auto industry and government will be closely monitoring developments as the sector navigates this transition period.