Ford takes a $19.5B writedown and cancels multiple EV programs as U.S. policy shifts and EV demand weakens. The automaker pivots toward hybrids and extended-range models.
Ford Retreats From EVs After Massive $19.5 Billion Charge Amid Policy Shift
Ford Motor Company has announced the most dramatic reversal yet in the automotive industry’s electric-vehicle ambitions, confirming a $19.5 billion writedown and the cancellation of several EV models as shifting U.S. policies and faltering consumer demand reshape the market.
The move revealed Monday marks a major strategic pivot as the automaker replaces the fully electric F-150 Lightning with a new extended-range electric model, powered partly by a gasoline engine that recharges the battery. Ford also scrapped its next-gen electric truck project T3, along with multiple planned electric commercial vans.
CEO Jim Farley told Reuters the company was forced to “make the call” after market conditions shifted sharply in recent months.
A Market Reshaped by Trump-Era Policies
Ford’s retreat underscores a broader slowdown in the U.S. EV market as President Donald Trump’s administration rolled back support for electric vehicles:
- The long-standing $7,500 EV tax credit expired September 30, leading to a 40% drop in November EV sales.
- Tailpipe-emission rules were relaxed, encouraging automakers to sell more gasoline vehicles.
- Penalties for failing to meet fuel-economy regulations were frozen.
These changes heavily impacted demand for the Lightning, which launched in 2022 with massive hype and over 200,000 reservations—yet sales fell 10% this year.
Hybrid Comeback and Long-Term Strategy
Ford now plans a significant shift toward gasoline and hybrid vehicles, aiming for a product mix of 50% hybrid/extended-range/EV by 2030, up from 17% today.
Key restructuring moves include:
- $8.5B charge tied to cancelled EV programs
- $6B charge related to dissolving Ford’s battery JV with SK On
- $5B in program-related expenses
- Replacement of the T3 EV truck with new gas-powered trucks in Tennessee from 2029
- A new $30,000 affordable EV targeted for 2027
- Thousands of new hires expected as Ford rebalances its manufacturing model
Ford also improved its 2025 earnings outlook to $7B, above previous guidance.
Competitors Also Pull Back From EV Push
Ford isn’t alone. General Motors recorded a $1.6B EV-related charge in October, while Stellantis shelved plans for an electric Ram pickup in favor of hybrids. Analysts say the shift may create a narrow window for pure-play EV makers like Tesla and Rivian but from a smaller overall market.
Battery Operations Restructured After SK On Split
After SK On exited their joint venture, Ford will independently run its two Kentucky battery plants, while SK On will keep the Tennessee facility. Ford will repurpose Kentucky and Michigan factories to produce energy storage system batteries within 18 months.
PistonKafalar Comment
Ford’s dramatic U-turn shows how fragile the EV transition remains when policy, consumer demand, and manufacturing costs fall out of alignment. This reset could slow the U.S. EV momentum significantly while opening strategic space for Chinese competitors and more agile EV-focused brands.
