Ford CEO Predicts EV Market Slump Without Subsidies, Records $19.5B Loss
Jim Farley, CEO of Ford, recently highlighted significant challenges facing the electric vehicle (EV) market. Without government subsidies, he predicts a substantial decline in EV sales.
Ford’s Shift in Strategy Amid Market Changes
Ford announced it will halt production of the original electric F-150 Lightning, a flagship EV model. Instead, the company will pivot to manufacturing a hybrid version featuring an extended range electric vehicle (EREV) with a gas-powered generator. This shift is expected to result in a $19.5 billion financial impact in 2026, underlining the urgency of the company’s new direction.
Predicted Decline in EV Sales
Speaking at the Ford Pro Accelerate summit in Detroit in September, Farley warned that the cessation of the $7,500 tax credit could reduce EV market share in the U.S. from an anticipated 10-12% to about 5%. He stated, “EVs will remain a vibrant industry, but much smaller than we thought.”
Current Market Status
According to Farley, the U.S. EV market has already contracted to approximately 5%. Many higher-priced models—costing between $50,000 and $80,000—are failing to capture consumer interest. He noted that Ford’s Model E division had accrued losses totaling $13 billion within its first three years, surpassing the company’s overall net income for 2024.
Customer-Centric Approach
- Ford aims to align its offerings with consumer preferences.
- The new emphasis will focus on hybrids and EREVs over fully electric vehicles.
- By 2030, it is projected that hybrids and EREVs will constitute half of Ford’s global sales.
While optimistic about profitability, Ford expects its Model E division to achieve this milestone by 2029, three years later than initially planned. Farley reiterated the company’s commitment to adapting to current market demands, ensuring their products align with consumer interests.
