Ford is reconsidering its commitment to electric cars. The company announced a radical change in its strategy and will stop producing several larger electric vehicles, due to lower-than-expected demand due to Trump’s policies, which penalized tax benefits the industry previously enjoyed to promote green cars and relaxed emissions standards. Given the radical change in planning, Ford will take on an extraordinary charge of $19.5 billion in its accounts. Shares are up 2% after hours in New York.
The company, based in Dearborn, Michigan, will stop manufacturing the F-150 Lightning in its electric version, which will shift to an extended-range electric vehicle (EREV) architecture in its next generation, and will also rule out a next-generation electric pickup truck, codenamed T3, as well as other planned electric commercial vans.
The group will assume the extraordinary charge of 19.5 billion for depreciation mainly in the fourth quarter, although this will continue over the next year and until 2027, according to the company. Of this total amount, approximately $8.5 billion is related to the cancellation of previously planned electric vehicle models. About $6 billion is related to the dissolution of a battery joint venture with South Korean company SK On, and $5 billion is related to what Ford called “program-related expenses.”
The company will instead focus on gasoline and hybrid models and expects its global share of hybrids, extended-range electric vehicles and pure electric vehicles to reach 50% by 2030, up from 17% today. It also announced it would hire thousands of workers, although there would be some layoffs at a Tennessee battery plant in the short term.
The automaker is thus shifting its investments toward what it sees as more profitable opportunities, including expanding its U.S. manufacturing capacity to add pickup trucks and vans to its product lineup and launching a new battery energy storage business.
“Instead of spending billions more on large electric vehicles that now have no path to profitability, we are investing that money in higher profit areas,” said Andrew Frick, director of gasoline and electric vehicle operations at Ford.
The automaker also raised its 2025 profit forecast to around $7 billion, up from a previous range of $6 billion to $6.5 billion.
Ford’s move reflects the auto industry’s response to declining demand for battery-powered models after companies invested hundreds of billions of dollars in electric vehicles earlier this decade.
The outlook for electric vehicles has deteriorated significantly this year, as U.S. President Donald Trump’s policies have withdrawn federal support for electric vehicles and relaxed emissions rules, which could prompt automakers to sell more gasoline-powered cars.
Sales of electric vehicles in the United States fell about 40% in November, after the September 30 expiration of a $7,500 consumer tax credit that had been in place for more than 15 years to boost demand. The Trump administration also included in the ambitious tax and spending bill passed in July a freeze on fines paid by automakers for violating fuel economy standards.
The F-150 Lightning rolled off the production line in 2022 and has been very well received by the public. For the record, even comedian Jimmy Fallon wrote a song about the truck.
Ford increased production of the model to meet the 200,000 orders it received, but sales did not keep pace. The company sold 25,583 Lightnings through November this year, down 10% from the same period last year.
The F-150 Lightning’s successor, the T3 pickup truck, would be built from the ground up for production at a new complex in Tennessee and would be a core part of Ford’s second-generation electric vehicle lineup. Ford is now replacing production of the electric truck with new gasoline trucks starting in 2029 at its Tennessee plant.
Ford virtually canceled its entire second generation of electric models with Monday’s announcement. For its future range of electric vehicles, the company is turning to more affordable models, designed by a Californian team. This team’s first model is expected to cost around $30,000 and go on sale in 2027. This mid-size electric pickup truck is manufactured at Ford’s Louisville plant.
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