Trump’s policies have taken a hold on the industry, causing Ford to retreat from EVs and take a big financial hit
Ford Motor said Monday it will take a $19.5 billion writedown and eliminate several electric-vehicle models, the most dramatic example yet of the auto industry’s retreat from battery-powered models in response to Trump administration policies and weak EV demand.
The Michigan-based company said it will replace the fully electric F-150 Lightning with a new extended-range electric model that uses a gas-powered engine to recharge the battery.
The company is also finishing the next generation electric truck, codenamed T3, as well as a planned electric commercial van.
“When the market really changed over the last few months, that was really the impetus for us to make the call,” Ford CEO Jim Farley told Reuters in an interview.
Ford said it will push harder into gas and hybrid models and eventually hire thousands of workers, even though there will be some layoffs at a jointly owned Kentucky battery plant in the near term.
The company expects the global mix of hybrid, extended-range EVs and pure EVs to reach 50 percent by 2030, up from 17 percent today.
The car company will spread the writedowns, which will primarily be taken in the fourth quarter and continue into next year and 2027, the company said. Approximately US$8.5 billion is related to the cancellation of planned EV models.
About $6 billion is tied to the dissolution of a battery joint venture with South Korea’s SK On, and $5 billion is what Ford called “program-related expenses.”
The automaker also raised its 2025 guidance for adjusted earnings before interest and taxes to about $7 billion, up from a previous range of $6 billion to $6.5 billion.
Ford shares rose about 1 percent in after-hours trading.
Trump’s policies reshape the EV market
Ford’s change reflects the auto industry’s response to declining demand for battery-powered models, after car companies poured hundreds of billions of dollars into EV investments earlier this decade.
The prospects for electrics dimmed significantly this year as U.S. President Donald Trump’s policies reduced federal support for EVs and eased tailpipe-emissions rules, which could encourage carmakers to sell more gas-powered cars.
U.S. electric vehicle sales fell nearly 40 percent in November following the expiration of a $7,500 consumer tax credit on Sept. 30 that was in place for more than 15 years to boost demand.
The Trump administration also included a cap on fines automakers have to pay for violating fuel-economy rules in the massive tax and spending bill passed in July.
The F-150 Lightning rolled off the assembly line in 2022 to much fanfare – comedian Jimmy Fallon wrote a song about the truck. Ford increased production of the model to meet the influx of 200,000 orders, but sales did not pick up.
The company sold 25,583 Lightnings till November this year, which is 10 percent less than last year.
The successor to the F-150 Lightning, the T3 truck, was to be built at a new complex in Tennessee, and was to be a core part of Ford’s second-generation EV lineup.
Ford is now replacing production of EV pickups at the Tennessee factory with new gas-powered trucks starting in 2029.
Ford effectively killed off all of its second-generation EV models with Monday’s announcement. For its future EV lineup, the company is focusing on more affordable EV models, conceived by the so-called Skunkworks team in California.
Ford plans to price that team’s first model at around $30,000 US and begin sales in 2027. Ford is manufacturing this mid-size EV truck at its Louisville plant.
“Instead of spending billions on big EVs that no longer have a path to profitability, we’re allocating that money to areas with higher returns,” said Andrew Frick, head of Ford’s gas and electric-vehicle operations.
Earlier this year, Ford said it expected to lose about $5 billion in its EV business this year, the same loss it would suffer in 2024.
GM and Stellantis also withdrew
The recent decline in EV sales in the US has led automakers to rush to bring electric models to market, competing against a shrinking pool of buyers. Like Ford, many traditional automakers are turning back to gas and hybrid models, while limiting their EV offerings to reduce losses in that sector.
Analysts have said this could give pure-play EV makers like Tesla and Rivian a chance to take market share, even if less overall.
General Motors took a US$1.6 billion charge in October as it adjusted its EV factory plans, and warned it could charge more in the future. Stellantis has also backed off on some of its EV plans, dropping a scheduled electric Ram pickup truck and leaning toward hybrids.
Some traditional automakers’ move toward hybrids follows the lead of Toyota Motor, a longtime market leader on hybrid models, which had emphasized the technology even during the industry’s EV euphoria.
Last year, Ford canceled a three-row electric SUV that it said at the time would cost up to $1.9 billion. The automaker said on Monday it now expects to be profitable on its EV business by 2029.
Ford’s EV production facilities and three battery plants in the south were disrupted last week when its joint venture partner SK On announced it was ending its partnership with Ford.
The automaker confirmed Monday that as part of the breakup, a Ford subsidiary will independently own and operate its Kentucky battery plants, and SK will own and operate the Tennessee battery plant.
Ford said it will use its battery plants in Kentucky and Michigan to produce energy storage system batteries, and plans to bring its initial capacity online within 18 months. The Marshall, Michigan, factory will also produce batteries for Ford’s $30,000 US midsize EV truck.
