Ford Motor announced a significant $19.5 billion US writedown and the discontinuation of various electric vehicle models in response to changing market conditions influenced by government policies and declining demand for electric vehicles. The company disclosed plans 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 canceling the development of a next-generation electric truck, codenamed the T3, and halting the production of electric commercial vans.
Ford’s CEO, Jim Farley, highlighted that market shifts in recent months prompted these strategic decisions. The company is now refocusing its efforts on gas and hybrid models and aims to increase its global mix of hybrid, extended-range electric vehicles, and pure electric vehicles to 50 percent by 2030, up from the current 17 percent.
The writedown will be spread out over several years, with a significant portion attributed to scrapping planned electric models. Ford also terminated a battery joint venture with SK On, incurring additional costs related to program expenses. Despite some immediate layoffs at a jointly owned battery plant in Kentucky, Ford anticipates hiring thousands of new employees.
In response to the changing landscape influenced by Trump administration policies, Ford, alongside other automakers, is scaling back its focus on electric vehicles to concentrate more on gas and hybrid offerings. The decline in EV sales following the expiration of federal tax credits has led to a shift in industry priorities towards traditional combustion engine vehicles.
As part of its revised strategy, Ford is planning to introduce more affordable EV models, starting with a midsize EV truck priced at around $30,000 US, set for release in 2027. By reallocating resources to more promising ventures, Ford aims to achieve profitability in its EV business by 2029. The company is also reorganizing its battery production facilities to support the production of energy storage system batteries and the new midsize EV truck.