Detroit – Ford Motor CEO Jim Farley said he expects demand for all-electric vehicles to be slashed in half next month following the end of federal tax incentives on Wednesday.

Farley on Tuesday said he “wouldn’t be surprised” if sales of EVs fell from a market share of around 10% to 12% this month — which is expected to be a record — to 5% after the incentive program ends.

“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 during a Ford event about promoting skilled trades and workers in Detroit. “We’re going to find out in a month. I wouldn’t be surprised that the EV sales in the U.S. go down to 5%.”

Farley said the industry learned that “partial electrification,” such as hybrids, are easier for customers to accept for the time being.

Farley said his Model e EV team is analyzing the demand for non-gas-powered vehicles each day. The company currently offers a handful of all-electric vehicles, including the F-150 Lightning pickup, which can top $90,000, and Mustang Mach-E crossover in the U.S.

The federal EV incentives of up to $7,500 are coming to an end as part of the Trump administration’s “One Big Beautiful Bill Act,” which stripped the old enticement but included some perks for buying a U.S.-assembled vehicle, regardless of it being an EV.

“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,” Farley said.

Once the bill was passed, sales of EVs quickly gained traction, especially as some automakers added even more discounts to move out older models.

Cox Automotive forecasts sales of EVs hit 410,000 during the third quarter, up 21% from a year earlier. That would easily be the highest amount of EVs ever sold in a quarter in the U.S., as well as a record 10% market share.

Cox and other industry analysts and executives expect many buyers pulled ahead plans to purchase an EV before the federal incentives sunset.

Farley also said the federal changes mean the auto industry, including Ford, will have to adapt, saying the company will have to figure out what to do with its battery plants and EV capacity.

“We’ll fill them, but it will be more stress, because we had a four-year predictable policy,” Farley said. “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.”

Farley was speaking Tuesday at the automaker’s “Ford Pro Accelerate” event, which features executives from many industries as well as public officials discussing the “essential economy” and need for skilled labor and education.