U-turn: Ford takes $US19.5b hit, retreats from EVs
Ford will take a US$19.5 billion ($29.3 billion) write-off and eliminate several electric vehicle models; This marks the most dramatic example yet of the auto industry’s retreat from battery-powered models in response to the Trump administration’s policies and weakening EV demand.
The Dearborn, Michigan-based company said it will replace the all-electric F-150 Lightning with a new, extended-range electric model that uses a gas-powered engine to charge the battery.
The company is also scrapping planned electric commercial vans, as well as a next-generation electric truck codenamed T3.
“When the market has really changed over the last few months, that’s really been the impetus for us to make that call,” Ford CEO Jim Farley told Reuters.
Ford has said it will make a strict transition to gas and hybrid models and eventually hire thousands of workers, although there will be some layoffs at its jointly owned Kentucky battery plant in the near future.
The company expects the global hybrid, extended-range EV and pure EV mix to reach 50 percent by 2030, up from 17 percent today.
The auto company will first distribute the loss taken in the fourth quarter and continue into next year and into 2027, the company said.
Approximately $8.5 billion is related to the cancellation of planned EV models. About US$6 billion is tied to the liquidation of a battery joint venture with South Korea’s SK On, while another US$5 billion is tied to what Ford calls “program-related expenses.”
The US automaker also raised its 2025 forecast for adjusted earnings before interest and taxes to around US$7 billion, up from its previous range of US$6 billion to US$6.5 billion.
Ford’s shift reflects the auto industry’s response to declining demand for battery-powered models after auto companies poured hundreds of billions of dollars into EV investments earlier this decade.
The outlook for electricity has diminished significantly this year as U.S. President Donald Trump’s policies withdraw federal support for electric vehicles and ease tailpipe emissions rules; This could encourage automakers to sell more gas-powered cars.
U.S. electric vehicle sales fell nearly 40 percent in November after a $7,500 consumer tax credit that had been in place for more than 15 years to stimulate demand expired on Sept. 30.
The Trump administration included a freeze on penalties paid by automakers for violating fuel economy regulations in the massive tax and spending bill passed in July.
For its future EV lineup, the company is focusing on more affordable EV models designed by the skunkworks team in California.
Ford plans to price the first model from this lineup at around $30,000 and start selling in 2027.
“Instead of spending billions of dollars more on big EVs that no longer have a path to profitability, we’re allocating that money to areas that generate higher returns,” said Andrew Frick, Ford’s president of gas and electric vehicle operations.
Ford said earlier this year that it expects to lose about $5 billion in its EV business, about the same as its loss in 2024.
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