Ford Motor announced a $19.5 billion writedown on Monday and disclosed its decision to discontinue several electric vehicle models. This move signifies a significant shift in the auto industry’s approach to battery-powered vehicles due to the impact of the Trump administration’s policies and weakening electric vehicle demand.
The Michigan-headquartered company revealed its plan to replace the all-electric F-150 Lightning with a new extended-range electric model incorporating a gas-powered engine for battery recharging. Additionally, Ford will abandon the development of a next-generation electric truck named the T3 and cease the production of planned electric commercial vans.
Ford’s CEO, Jim Farley, explained that changing market conditions prompted the company’s strategic shift. Consequently, Ford intends to focus more on gas and hybrid models, leading to the hiring of thousands of workers while acknowledging potential layoffs at a jointly owned Kentucky battery plant in the short term. The company aims to increase the proportion of hybrids, extended-range EVs, and pure EVs in its global lineup to 50% by 2030, up from the current 17%.
The writedown, spread over the fourth quarter of this year and continuing into 2027, includes $8.5 billion related to the cancellation of planned EV models, $6 billion linked to dissolving a joint venture with SK On from South Korea, and $5 billion in program-related expenses. Ford also revised its 2025 adjusted earnings before interest and taxes guidance to approximately $7 billion, up from the previous range of $6 billion to $6.5 billion.
Ford’s strategic pivot echoes the broader trend in the auto industry, responding to the decreasing demand for electric vehicles following regulatory changes under the Trump administration. Notably, U.S. electric vehicle sales plummeted by about 40% in November after the expiration of a long-standing $7,500 consumer tax credit on September 30.
The company’s decision to discontinue its second-generation EV models underscores its commitment to developing more affordable EVs designed by a specialized team in California. Ford plans to introduce the first model from this initiative, priced around $30,000, in 2027. Ford aims to enhance profitability by reallocating resources to higher-return areas rather than investing further in large EVs with uncertain profitability prospects.
In response to the evolving market dynamics, other automakers like General Motors and Stellantis have also scaled back their EV plans and focused on gas and hybrid models. This strategic shift among traditional automakers is anticipated to create opportunities for pure-play EV manufacturers like Tesla and Rivian to gain market share in a reduced electric vehicle market.
Ford’s move towards profitability in its EV business by 2029 aligns with its restructuring efforts, including the independent operation of battery plants in Kentucky and Michigan following the termination of its partnership with SK On. The company plans to repurpose these facilities to produce energy storage system batteries and support the production of its midsize EV truck priced at $30,000.