Ford to record $19.5 billion in special charges related to EV pullback
DETROIT — Ford Motor The company announced Monday that it expects to record about $19.5 billion in special items due to a restructuring of business priorities and a pullback in all-electric vehicle investments.
The Detroit automaker said most of these charges will occur in the fourth quarter. Ford said this will be followed by $5.5 billion in cash to be collected by 2027, and the majority of this amount will be paid next year.
The charges will impact the automaker’s net results but not adjusted earnings. The automaker said Monday it will raise its forecast for adjusted earnings before interest and taxes to about $7 billion in 2025. This is in line with the target earlier this year, before the company lowered its adjusted EBIT expectations in October to between $6 billion and $6.5 billion.
The charges announced Monday, including an $8.5 billion write-down of electric vehicle assets, are tied to major changes in Ford’s business plans.
New plans include refocusing investments on hybrid vehicles, including rechargeable models, rather than fully electric vehicles; canceling the next generation of large all-electric trucks in exchange for smaller, more affordable EVs; and rebalancing investments in core products like trucks and SUVs.
The changes are the latest in Ford CEO Jim Farley’s “Ford+” restructuring plan, which has taken many different forms since he first announced it as an electric vehicle growth plan in 2021.
“We evaluated the market and made the call,” Farley told CNBC’s “Closing Bell Overtime” on Monday. “We follow our customers to where the market is – not where people think it will be, but where it is today.”
Ford, GM and Stellantis shares.
The electric vehicle segment suffered a decline in domestic sales after the Trump administration in September prematurely ended the $7,500 federal tax credit previously offered to electric vehicle buyers in the United States.
Farley said on CNBC that politics “isn’t the only reason we made this choice,” but acknowledged that it played a role.
Ford also announced Monday that its all-electric F-150 Lightning pickup will transition to an extended-range EV (EREV), which includes a gas-powered generator along with electric powertrains, and plans to use battery facilities in Kentucky and Michigan for a new stationary energy storage business.
“The last few months have been really clear for us,” Farley told CNBC’s Phil LeBeau. “They weren’t selling very high-end EVs ($50,000, $70,000, $80,000).”
Ford said the changes are expected to offer “a path to profitability” for its Model e electric vehicle business by 2029, and that it is targeting annual improvements from 2026. The automaker also said it expects the changes to boost profits “over time, with early signs of benefits in 2026” at its traditional Ford Blue unit and Ford Pro commercial and fleet business.
The automaker said it expects about 50% of its global volume to consist of hybrids, EREVs and fully electric vehicles by 2030; This rate is higher than 17% in 2025.
“These are big decisions that we believe will pay off for our customers, our employees, and American jobs and manufacturing for years to come,” Andrew Frick, president of the Model e and Blue businesses, said during a media call Monday. “Ford follows the customer. We look at the market as it is today, not as everyone predicted five years ago.”
Ford said it will focus its North American electric vehicle development on its new, low-cost, flexible Universal EV Platform, which is expected to support “a high-volume family of smaller, highly efficient and affordable electric vehicles.”
The new platform’s first vehicle will be a “fully connected midsize pickup truck” assembled at the company’s Louisville Assembly Plant starting in 2027.
The company also expects its new storage business to be manufacturing and transportation units for things like “data centers, the power grid, and much more” by 2027, Frick said.
“This is a compelling opportunity. It’s a market with great potential and strong demand,” he said. “We will have 20 gigawatt hours of annual capacity for this market.”
Ford shares rose nearly 2% in after-hours trading Monday.
Ford shares closed down less than 1% at $13.65 on Monday. As of Monday’s close, Ford shares were up nearly 40% this year.
