Ford CEO James Farley addressed the pressing challenges facing the electric vehicle (EV) market during his speech at the “Ford Pro Accelerate” event. He noted that significant changes in federal policies are indeed coming soon. He warns that in combination, these changes will likely reduce sales of EVs as the administration prepares to jaywalk into junking tax rebates.
Farley’s remarks were made in the context of the Reindustrialize Conference 2025 held July 16, 2025 in Detroit, Michigan. By extension, he expressed concerns over Ford’s forthcoming EV sales. He proposed that they could drop from the current 10% to 12% range all the way down to 5% or lower after the incentive programs are phased out. This prediction highlights a larger doubt pervading the automotive industry about consumers taking to EVs without substantial monetary inducements.
Farley stated that while these adjustments are necessary and could be beneficial for the country in the long term, they will create additional stress for manufacturers. “Now the policy changed. … We all have to make adjustments, and it’s going to be good for the country, I believe, but it will be one more stress,” he noted.
He stressed that we all knew in advance what four-year policy Ford was going to implement. Unfortunately, that stability is being disrupted by new federal regulations on tailpipe emissions. As a result, Farley indicated that Ford must adapt and reassess its production strategies, particularly concerning battery plants and overall EV capacity.
“This is a time for us to figure out what to do with our battery plants and EV capacity,” Farley remarked. His remarks are merely a symptom of the greater realization that automakers must turn on a dime, especially as competitive market forces and consumer preferences have begun to shift.
Farley went on to discuss why customers are excited about EVs. He added that for many consumers they are very desirable but for their prohibitively expensive price tags. “Customers are not interested in the $75,000 electric vehicle. They find them interesting. They’re fast, they’re efficient, you don’t go to the gas station, but they’re expensive,” he stated.
Further, he spoke about the industry’s move to embrace “partial electrification,” what he called a compromise that’s easier for buyers to swallow. He referred to hybrids as “costly, speedy, money-efficient.” This continues to support the narrative that consumers will flock to a cheaper hybrid alternative rather than a fully electric vehicle.
In spite of these hurdles, Farley is hopeful about the trajectory of the car industry. “I think it’s going to be a vibrant industry, but it’s going to be smaller, way smaller than we thought, especially with the policy change in the tailpipe emissions, plus the $7,500 consumer incentive going away,” he said.