Alarm for electric cars in the United States. Without federal incentives, demand could drop by 50%, Ford CEO warns.
The future of the electric car hangs by a thread. Jim Farley, CEO of Fordhas issued a warning that sounds like a wake-up call for the entire automotive industry. Without the $7,500 federal tax credit in the United States, demand for electric vehicles could plummet by up to 50%, throwing major automakers’ electrification plans into question.
Currently, electric cars represent between 10% and 12% of the US market, but Farley believes that, without incentivesthat share could shrink to just 5%. A level similar to that of 2022 and very far from the industry’s growth expectations. The elimination of aid represents a serious blow to the sector.
During the “Ford Pro Accelerate” event held in Detroit, Farley declared that the electric market will be “vibrant, but much smaller than had been expected. We will discover the extent of the phenomenon in just a month. I wouldn’t be surprised if U.S. electric sales dropped to 5%” said the CEO.
Ford, which had planned huge investments in production capacity and battery factories, is now faced with the challenge of managing possible excess production should demand drop sharply.
Electric car market halved without incentives
One of the big challenges builders face is price. According to Farley, consumers show little interest in electric cars $75,000 or morea segment that continues to be a minority and difficult to support without subsidies. The company is already studying the launch of more accessible models, although it recognizes that, without federal incentives, achieving competitive prices will be even more complicated.
Ford’s message reflects the uncertainty that the automotive sector in the United States is experiencing and which could shape the speed of adoption of electric cars in the coming years. While Europe and China advance with strict regulations and public support, dependence on fiscal aid has become a critical factor in the American market.
The different strategy between the USA and the rest of the world
The situation is critical and requires a rapid and strategic response from the automotive industry. The reduction of request of electric cars could have significant consequences on the economy and the environment.
In this context, it is important to evaluate the options available to support the growth of the electric car market. This could include the creation of alternative incentives or the promotion of more accessible and competitive models.
