Ford Motor announced a significant $19.5 billion writedown on Monday and disclosed plans to discontinue several electric vehicle models. This move represents a notable shift in the auto industry’s stance on battery-powered vehicles, influenced by the Trump administration’s policies and declining demand for electric cars.
The Michigan-headquartered company revealed its decision to replace the all-electric F-150 Lightning with a new extended-range electric model that incorporates a gas-powered engine for battery recharging. Additionally, Ford is abandoning a next-generation electric truck known as the T3 and electric commercial vans that were in the pipeline.
Ford’s CEO, Jim Farley, attributed the company’s strategic shift to recent market dynamics. Farley stated in an interview with Reuters that the changing landscape prompted the decision. The automaker now plans to focus more on gas and hybrid models, aiming to increase its global mix of hybrids, extended-range EVs, and pure EVs to 50% by 2030, up from the current 17%.
The company anticipates spreading out the $19.5 billion writedown over several years, with approximately $8.5 billion linked to the cancellation of planned EV models. Another $6 billion is associated with terminating a battery joint venture with SK On of South Korea, and $5 billion is earmarked for program-related expenses.
Despite the restructuring and layoffs expected at a Kentucky battery plant, Ford raised its 2025 adjusted earnings before interest and taxes guidance to around $7 billion, up from the previous range of $6 billion to $6.5 billion. Following the announcement, Ford’s shares experienced a 1% increase in after-hours trading.
The shift in Ford’s strategy mirrors a broader industry trend in response to reduced demand for electric vehicles, influenced by President Trump’s policies that rolled back federal support for EVs and relaxed emissions regulations. Sales of electric vehicles in the U.S. dropped around 40% in November, following the expiration of a long-standing consumer tax credit for EVs.
Ford’s decision to discontinue its second-generation EV models underscores a pivot towards more affordable EV offerings, with plans to introduce a midsize EV truck priced around $30,000 by 2027. The company aims to focus on higher-returning areas and achieve profitability in its EV business by 2029.
Other automakers, including General Motors and Stellantis, have also recalibrated their EV strategies, emphasizing hybrids and scaling back on purely electric models. This shift could present opportunities for dedicated EV manufacturers like Tesla and Rivian to capture a larger market share in the evolving automotive landscape.
