Ex-Ford CEO: US EVs to see ‘gradual growth’ after incentives withdraw

Former Ford CEO Mark Fields said Friday that demand for electric vehicles in the United States will slowly recover after the Trump administration removed federal incentives for electric vehicles in September.

“You’re obviously going to see some pushback given the removal of federal incentives, but I think you’re going to see incremental growth in the electric vehicle market,” Fields, 64, said in an interview with CNBC.

Fields said that in the long term, consumers will turn to clean energy vehicles rather than combustion engine vehicles because “oil is a non-renewable resource.”

“So you’re going to see them grow over time, but it’s not going to happen at the rate that the automakers thought,” Fields said. “That’s why you see these significant impairment charges that Ford, GM and others have taken.”

On Oct. 14, General Motors said in an exchange filing that it was taking a $1.6 billion charge “based on a planned strategic realignment of our electric vehicle capacity.” The automaker said it expects “the rate of adoption of electric vehicles to slow” after federal incentives for electric vehicles expire on September 30.

“I think you’re going to see more of that as the industry adapts to a new demand curve, if you will, for electric vehicles,” Fields continued.

Representatives for Fields did not respond to a request for comment from Business Insider.

Under the Biden administration, electric vehicle buyers could take advantage of a $7,500 consumer tax credit when purchasing a new electric vehicle and a $4,000 credit for a used electric vehicle. The Trump administration terminated both projects.

Fields served as CEO of Ford from 2014 to 2017. He joined the company in 1989 after earning an MBA from Harvard Business School. Prior to becoming CEO, Fields held various senior management positions and was Ford’s chief operating officer from 2012 to 2014.

Earlier this month, Fields said U.S. automakers had overestimated consumer demand for electric vehicles and had “gone all out” to make them.

“What was a benefit, or so they thought at the time, has probably turned into a bit of an albatross because the market adoption of electric vehicles is going to be lower, at least in the short to medium term, than they anticipated,” Fields told CNBC in an interview that aired Oct. 14.

Former Tesla chairman Jon McNeill had a different view than Fields. McNeill served as Tesla’s president of global sales and marketing from 2015 to 2018. He said in an interview with CNBC on October 2 that the expiration of federal incentives for electric vehicles will not slow down the U.S. electric vehicle market.

“In Europe, France and Germany in particular removed subsidies a few years ago, and what happened after that, surprisingly, was that the market continued to grow,” McNeill told CNBC.

“The market is established and we are probably ready to have a market that can grow without subsidies,” he added.

Current Ford CEO Jim Farley said at a conference in Detroit on September 30 that removing federal incentives for electric vehicles could cut U.S. electric vehicle sales in half.

“In the short term, I think electric vehicle adoption will now only be about 5% of the U.S. market, but that will grow, especially for affordable electric vehicles,” Farley said during an Oct. 23 earnings conference call.

Ford shares are up nearly 40% year to date.