By Ryan Felton and Christopher Otts
Automakers are scrambling to unload lingering electric vehicles on dealer lots around the country, now that a $7,500 tax credit that juiced EV sales for years has expired.
The EV credit, which expired Tuesday, has lifted battery-powered car sales for years. Without it, Ford Chief Executive Jim Farley predicted, EV market share will fall by more than half to between 4% and 5% of total sales by the end of the year.
"We expect a pretty deep fall off," Farley said on the sidelines of a company event in Detroit.
Christian Meunier, chairman of Nissan's Americas region, said October should be the worst market in years for EVs.
"Manufacturers are going to have to push cars away because demand is not going to be there," he said.
Dealers have about 134,000 unsold EVs, according to the latest data from Cox Automotive. At the current rate of sales, that means dealers will need two months to sell off the remaining supply.
EV sales were scorching in the final month of the tax credit, lifted by deals that in some parts of the country allowed customers to snatch up an EV for as little as $39 a month. Electric models represented an estimated 12.2% of retail sales in September, up 2.6 percentage points from a year earlier for a record share, according to J.D. Power, an industry-research firm.
Most major carmakers report their latest quarterly sales results Wednesday. Spurred by the EV surge, overall sales are on pace for a slight increase from a year earlier, J.D. Power said.
For years, Ford and crosstown rival General Motors have been building up a supply chain to support the rollout of numerous EVs, only to see consumer demand dry up and federal support for the technology wind down.
EV growth stagnated in the U.S. partly because of high sticker prices, even with the tax credit factored in. The average EV sold for upward of $57,000 in August, over $9,000 more than a comparable gas-powered car, according to Cox Automotive, an industry-research firm.
Ford and other automakers have recognized that they need to significantly rein in costs of EV production if they are ever going to succeed in the U.S. Ford recently unveiled a $2 billion project to overhaul a Louisville, Ky., factory to build a new line of affordable, high-tech EVs. The first model, a $30,000 pickup, is expected in 2027.
"It's going to be a vibrant industry, but it's going to be smaller -- way smaller -- than we thought," Farley said.
Meunier, the Nissan executive, said he thinks automakers will need to lean on promotions to sell down remaining EVs, likely keeping sales artificially swollen until the end of the year.
"You'll see still quite a lot of sales because of what has been built," he said.
Ford and GM said Tuesday they would both keep incentivizing battery-powered car sales to help contain the fallout of the credit ending. A GM spokesman said the company is working with dealers on a way to extend the $7,500 credit for leases for an unspecified time. Reuters reported Monday that the automakers were signing up dealers for programs that would effectively extend the credit.
Ford said it is working to provide EV shoppers with "competitive" lease payments through its finance arm until the end of the year. Farley acknowledged its promotion will require significant financial support from Ford. The company expects to lose about $5 billion in its EV business this year.
"I don't want to imply -- at all -- that those kind of programs are going to last forever," Farley said. "It's a transition."
Write to Ryan Felton at ryan.felton@wsj.com and Christopher Otts at christopher.otts@wsj.com
(END) Dow Jones Newswires
October 01, 2025 09:00 ET (13:00 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.
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