Ford Motor announced a significant $19.5 billion writedown and the discontinuation of several electric vehicle models, signaling a shift away from battery-powered vehicles in response to changing market dynamics influenced by the policies of the Trump administration. The company revealed plans to replace the all-electric F-150 Lightning with a new extended-range electric model featuring a gas-powered engine for battery recharging. Additionally, Ford is scrapping a next-generation electric truck known as the T3, along with electric commercial vans.
Ford’s CEO, Jim Farley, explained that recent market shifts prompted the strategic decisions. The company intends to focus more on gas and hybrid models, aiming to increase the global mix of hybrids, extended-range EVs, and pure EVs to 50% by 2030 from the current 17%. While layoffs are expected in the near term at a jointly owned Kentucky battery plant, Ford plans to hire thousands of workers as it transitions its focus.
The writedown, to be spread out over several years, includes approximately $8.5 billion related to canceling planned EV models, $6 billion linked to the dissolution of a battery joint venture with South Korea’s SK On, and $5 billion designated for program-related expenses. Ford also raised its 2025 adjusted earnings before interest and taxes guidance to about $7 billion, up from the previous estimate.
The shift in Ford’s strategy reflects broader trends in the auto industry as demand for battery-powered vehicles wanes, partly influenced by policy changes under the Trump administration that reduced support for EVs and eased emissions regulations. U.S. EV sales declined significantly following the expiration of a long-standing consumer tax credit and regulatory changes favoring gas-powered vehicles.
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 at around $30,000 by 2027. The company will focus on these new models developed by a team in California, reallocating resources from larger EVs that lack profitability prospects.
Other automakers, including General Motors and Stellantis, have also adjusted their EV plans and expanded their gas and hybrid model offerings to mitigate losses in the EV market segment. Ford’s move to streamline its EV lineup and focus on profitability aligns with industry trends as traditional automakers navigate the evolving landscape of electric and hybrid vehicles.
