U.S. automaker Ford said on Monday it is overhauling its loss-making electric vehicle business, taking a hefty impairment charge expected to total about $19.5 billion, most of it booked in the current quarter, in what analysts attributed to the Trump administration's policies and weakening EV demand.
As part of the shake-up, Ford will discontinue the fully electric version of its large F-150 pickup truck, it said. The carmaker, instead, plans to put greater emphasis on hybrid vehicles and focus its electric line-up on smaller models.
The Dearborn, Michigan-based company said it will replace the F-150 Lightning with a new extended-range electric model that uses a gas-powered engine to recharge the battery. The company is also scrapping a next-generation electric truck, codenamed the T3, as well as planned electric commercial vans.
After the success of Tesla, major U.S. carmakers including General Motors, Ford and Stellantis poured billions of dollars into expanding their electric offerings, including plans to electrify popular pickup trucks. The F-150 is one of the bestselling vehicles in the U.S. market.
But electric pickups – whether Ford's or Tesla's Cybertruck – have failed to sell in the volumes companies had hoped for.
“When the market really changed over the last couple of 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 pivot hard 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 its global mix of hybrids, extended-range EVs and pure EVs to reach 50% by 2030, from 17% today.
The car company will spread out the write-down, taken primarily in the fourth quarter and continuing through next year and into 2027, it said. About $8.5 billion is related to canceling planned EV models. Around $6 billion is tied to the dissolution of a battery joint venture with South Korea’s SK On, and $5 billion on 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% in after-hours trading.
Ford’s shift reflects the auto industry’s response to waning demand for battery-powered models, after car companies plowed hundreds of billions of dollars into EV investments early this decade.
The outlook for electrics dimmed significantly this year as U.S. President Donald Trump’s policies yanked federal support for EVs and eased tailpipe-emissions rules, which could encourage carmakers to sell more gas-powered cars.
U.S. sales of electric vehicles fell about 40% in November, following the Sept. 30 expiration of a $7,500 consumer tax credit, which had been in place for more than 15 years to stoke demand. The Trump administration also included in the massive tax and spending bill that passed in July a freeze on fines that automakers pay for violating fuel-economy regulations.
The F-150 Lightning rolled off assembly lines starting in 2022 with much fanfare – comedian Jimmy Fallon wrote a song about the truck. Ford increased production of the model to meet an influx of 200,000 orders, but sales haven’t kept pace. The company sold 25,583 Lightnings through November of this year, a 10% decrease from the prior-year period.
The successor to the F-150 Lightning, the T3 truck, was supposed to be built from the ground up at a new complex in Tennessee and be a core part of Ford’s second-generation EV lineup. Ford is now replacing production of the EV pickup with new gas-powered trucks starting in 2029 at the Tennessee factory.
Ford effectively killed the entirety of its second generation of EV models with Monday’s announcement. For its future EV lineup, the company is shifting focus to more affordable EV models, conceived by a so-called skunkworks team in California. Ford plans to price the first model from that team at about $30,000 and begin sales in 2027. Ford is building this midsize EV truck at its Louisville plant.
“Rather than spending billions more on large EVs that now have no path to profitability, we are allocating that money into higher-returning areas,” said Andrew Frick, head of Ford’s gas and electric-vehicle operations. Earlier this year, Ford said it expected to lose roughly $5 billion on its EV business this year, about the same as it lost in 2024.
