The largest in the history of the American automotive industry, Ford "massively provisions $19.5 billion," strategically abandoning pure electric vehicles in favor of hybrids and extended-range vehicles

Ford Motor announced on Monday that it will record approximately $19.5 billion in charges, primarily related to its electric vehicle business, marking the largest strategic adjustment in the U.S. automotive industry to date. This massive charge signifies that the Detroit automaker acknowledges it cannot achieve its electric vehicle ambitions in the short term.

Ford stated it will cease production of the F-150 Lightning all-electric pickup truck and instead produce a range-extended version equipped with a gasoline engine. The automaker, which has lost $13 billion in its electric vehicle business since 2023, will shift its strategic focus to hybrid and range-extended electric vehicles while strengthening its lineup of traditional gasoline vehicles.

This shift reflects the dual pressures of changing regulatory environments and weak market demand. The Trump administration rolled back some of the strictest clean air and fuel economy regulations this year, and at the end of September, it eliminated the $7,500 tax credit for new energy vehicle purchases. Consumers are hesitant about all-electric vehicles due to high prices, concerns about range, and insufficient charging stations.

Ford CEO Jim Farley stated in an interview, "Rather than pouring billions into large electric vehicles that will never be profitable, we choose to pivot." He emphasized that the company now has a clearer understanding of the U.S. market and will reallocate capital originally intended for electric vehicles to more profitable models.

Strategic Major Adjustment: From Full Electrification to Hybrid

Ford plans that by 2030, hybrid, range-extended electric vehicles, and all-electric vehicles will account for about 50% of its global sales, up from 17% this year. The company will cancel production plans for the all-electric F-150 pickup, another electric truck, and an electric commercial van.

The only all-electric project retained is the planned $30,000 electric pickup set to launch in 2027. Farley stated this will be the first product of a new generation of low-cost electric vehicles, "This is now at the core of our electric vehicle strategy in the U.S., and we must make it happen."

Ford's Model e electric vehicle division recorded a loss of $5.1 billion in 2024 and a loss of $3.6 billion in the first three quarters of 2025. The company stated that through strategic adjustments, it aims to achieve profitability in its electric vehicle business by 2029.

Andrew Frick, who oversees Ford's gasoline and electric business, stated in a media conference call, "We are examining the current market situation today, not just what everyone predicted five years ago. American consumers have 'made it very clear' that while they want the advantages of electric vehicles, they demand affordability, range assurance, and vehicles that meet their work and usage needs."

Composition of the $19.5 Billion Charge

Of the $19.5 billion pre-tax charge, $12.5 billion will be recorded in the fourth quarter to streamline electric vehicle assets, including $3 billion for terminating the battery joint venture with South Korea's SK Group. The remaining charges are expected to be recorded gradually before 2027.

In Kentucky, Ford and SK have invested nearly $6 billion to build what is touted as the largest single-site battery manufacturing facility in the U.S. However, one of the two plants has been idle and never installed equipment; the other is operating far below capacity, only producing batteries for the now-canceled F-150 electric version Ford's new plan requires using only 23% of the original capacity of its Kentucky plant by 2027, at which point it will begin producing stationary energy storage batteries for data centers. To increase revenue, Ford will transform this battery factory into an energy storage business, serving customers such as utility companies, wind and solar developers, and large data centers training artificial intelligence.

Ford plans to hire thousands of new employees across the United States, but approximately 1,600 workers at the battery factory will be laid off during the factory's repositioning.

Industry Withdrawal Signals

Ford's strategic shift is a new sign that, after a transformation push, the U.S. road will continue to be dominated in the short term by a large number of fuel vehicles and an increasing number of hybrid vehicles.

General Motors has been forced to abandon its plan to achieve a fully electric vehicle lineup by 2035 and wrote down $1.6 billion in electric vehicle assets in the third quarter, suggesting that more write-downs will follow as electric vehicle production capacity is cut. General Motors acknowledged that once it decided to produce fuel vehicles at the planned electric vehicle factory, the equipment purchased for that factory was wasted. General Motors also stated that the soon-to-be-relaunched Chevrolet Bolt's batteries will be supplied by Chinese giant CATL.

Automakers and battery companies have been competing to repurpose electric vehicle battery factories to serve the growing data center and utility markets rather than vehicles. General Motors, South Korea's LG Group, and Jeep parent company Stellantis have all shifted to stationary energy storage batteries.

These moves reflect automakers' judgment: what Americans want in electric vehicles are the smaller, more affordable models produced by Chinese automakers and sold outside the U.S.

Financial Guidance Upgraded

Despite facing significant write-downs, Ford has raised its full-year financial guidance, expecting adjusted EBIT of $7 billion, up from the $6 billion to $6.5 billion forecasted in October.

Ford reports revenue of $185 billion and a net profit of $5.9 billion for 2024.

Farley welcomed Trump's proposal to significantly lower U.S. vehicle fuel efficiency standards during a photo opportunity in the Oval Office last week, a decision that could ease Ford's pressure to electrify its fleet to meet average fuel consumption requirements in its U.S. business.

Farley stated that the high cost of electric vehicle batteries is particularly difficult to overcome, posing a fatal problem for large trucks, which are at the core of the company's strategy. Coupled with the decline in electric vehicle enthusiasm post-pandemic and the demand from truck buyers, this has led to the failure of that strategy.

Farley said that rather than betting everything on a single technology, the company would benefit more from a mix of vehicle models. "This is a better solution for customers," he said, "None of us knows what the future will hold, but Ford has enough understanding of the future to know that this combination is the right one."