Ford's shift away from EVs could be ominous sign for US market
With Ford Motor Company (F) announcing that it will be taking about a $19.5 billion writedown in a dramatic shift away from its unprofitable electric vehicle business, it raises questions about the health of the broader EV market in the United States during the Trump era.
The automaker said that the massive special item charges will mostly occur in the fourth quarter, with the remainder in 2026 and 2027. The charges will occur as the company kills production of its electric F-150 truck and refocuses on hybrid and extended range EV vehicles.
Ford said that it will be replacing its fully electric F-150 Lightning truck with an extended-range electric vehicle that utilizes a gas-powered engine to recharge the battery.
The company is not completely abandoning its fully electric business. Ford is still planning to release a lower-cost EV pickup in 2027 with a starting price of about $30K.
Ford said that 50% of its global volume will be hybrids, extended range EVs and fully electric vehicles by 2030, up from 17% in 2025.
The company will also look to boost revenue by repurposing its EV-battery factory in Kentucky into a battery storage business that it will rent out to customers such as utilities and AI data centers.
“This is a customer-driven shift to create a stronger, more resilient and more profitable Ford,” Ford president and CEO Jim Farley said in a statement. “The operating reality has changed, and we are redeploying capital into higher-return growth opportunities: Ford Pro, our market-leading trucks and vans, hybrids and high-margin opportunities like our new battery energy storage business.”
Ford has long been struggling to turn its EV fleet into a profitable business, losing $13 billion since 2023.
But not too long ago, the automaker had ambitious plans for its electric vehicles, saying in 2021 that it would be ramping up its investments in EVs to $30 billion by this year.
Ford projected that 40% of its global vehicle sales would be all-electric by 2030, including its battery powered Mustang Mach-e, which accounted for approximately 70% of new sales in 2021.
This was also the year it launched the F-150 Lightning, which immediately garnered about 70,000 customer reservations.
EV sales are plummeting in the US
Of course, these ambitions were warranted during the Biden era, as the former president was pushing to increase the number of EVs on American roads by introducing a $7,500 tax credit for consumers.
That tax credit expired at the end of September, as the Trump administration seeks to reverse Biden's efforts and instead focus on gas-powered vehicles.
And while Ford's struggles with its EV business are perhaps greater than that of its rivals, its shift away from fully electric vehicles could also be a sign of the challenges the entire EV industry will face now that it no longer has political support to drive up consumer demand.
In fact, even Tesla (TSLA), which is far and away the top EV automaker in North America, appears to be suffering as a result of the EV tax credit being eliminated.
The automaker sold approximately 39,800 vehicles in the US in November, a 23% drop from November 2024, according to data from Cox Automotive.
Overall US EV sales plunged 41% in November. Sales in October also fell 30.3% year-over-year.
And Ford isn't alone in shifting its strategy on EVs as the new political reality sets in. General Motors, which had once set its sights on an all-EV fleet by 2035, took a $1.6 billion charge in October when it decided to reduce its electric vehicle manufacturing capacity, citing the Trump administration's elimination of the tax subsidies.
Faced with this new political reality, US automakers are now going to find out whether the Biden-era tax subsidies "created a false market for EVs that exceeded genuine consumer demand," as some have argued. If it turns out to be true, more companies could follow the lead of Ford and GM in moving away from EV manufacturing.
Despite making the $19.5B write down, Ford raised its earnings for the year to $7 billion, up from a previous projection of $6 billion to $6.5 billion. The company attributed the increase to "continued underlying business strength," as well as cost improvements.