Ford $F ( ▲ 2.59% ) CEO Jim Farley is weighing in on the elimination of the federal EV tax credit, and warning that electric vehicle sales could fall by nearly half once the subsidies are cut.
The details: Farley made the statement, speaking at the Ford Pro Accelerate skilled trades conference on Tuesday. He also confirmed a Reuters report that the automaker is rolling out a program to effectively extend the use of the $7,500 U.S. tax credit on EV leases beyond the September 30 expiration of the federal subsidy.
Under the program, Ford’s financing arm will purchase EVs in dealer inventory by making down payments on the vehicles.
Those down payments will qualify the lending arm for the federal $7,500 tax credit.
Dealers can then lease those EVs to retail customers for a few more months, with the subsidy factored into the lease rate.
What they’re saying: “Customers are not interested in the $75,000 electric vehicle...” said Ford CEO Jim Farley, (via The Detroit News). “I wouldn't be surprised if the EV sales in the U.S. go down to 5% of our industry from probably this month, 10%, 12%."
Why it matters: The lease program could be a much-needed lifeline for Ford dealers still holding EV inventory, cushioning the blow from the end of the federal subsidy and waning demand.
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Between the lines: Beyond the short-term lease fix, Ford is laying out a longer-term EV strategy designed to weather headwinds and reignite growth in the segment.
In August, the automaker said it would delay the launch of two new EVs, including an E-Transit van and the successor to the F-150 Lightning, now pushed back until 2028.
Ford is also investing nearly $2 billion to retool a Kentucky facility for more affordable EVs, beginning with a mid-size electric truck.
“Vehicles assembled on this platform will be affordable for the average family—but also highly efficient, customizable, and fun to drive. And they won’t be stripped down to the bare essentials,” Farley said in a press release, with Ford touting the strategy as a “Model T Moment.”
Bottom line: Ford is preparing for a sharp EV sales slowdown as federal tax credits vanish, but its lease program offers dealers short-term relief. Longer term, its push toward affordable, family-friendly EVs is meant to keep the brand competitive and connected to customers during a turbulent transition for the U.S. EV market.
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