Ford Takes $19.5 Billion Hit as It Reworks Electric Vehicle Roadmap

Key Moments

Ford recorded a $19.5 billion charge tied to electric-vehicle investments,
mainly from canceled EV programs and battery ventures.
As a result, the company halted development of its next-generation EV
lineup, including a large pickup planned for Tennessee.
Meanwhile, Ford plans to invest $2 billion in battery production for
energy-storage services over the next two years.

Ford’s EV Reset and the $19.5 Billion Charge

Ford Motor announced a $19.5 billion charge on its electric-vehicle business
on Monday. The move highlights a broader industry pullback from EV technology.

Earlier in the decade, automakers aggressively embraced electric vehicles.
However, Ford now plans to expand gasoline-powered models and hybrids to better
match U.S. consumer demand.

Breakdown of the Writedown

The total charge includes several components related to Ford’s EV strategy
and partnerships:

Component	Amount	Description
Future EV program cancellations	$8.5 billion	Costs tied to ending several upcoming EVs, including a large pickup planned for Tennessee
Battery joint venture with SK On	$6 billion	Writedown related to the closure of a joint-venture battery operation with SK On
Additional program-related expenses	$5 billion	Other costs linked to Ford’s EV programs
Total charge	$19.5 billion

Ford said only about $5.5 billion of the charge will affect cash flow.
That impact should begin next year and extend into 2027.

Next-Generation EVs Shelved

Ford has effectively dropped plans for its next wave of fully electric
vehicles. These include a large pickup and certain commercial vans.

Meanwhile, the Tennessee facility once slated to produce 500,000 electric
trucks will now build gasoline-powered pickups.

Instead, Ford will focus on lower-cost EVs developed by a specialized team
in California. The group’s first product is expected to be a midsize pickup
priced near $30,000.

Currently, Ford plans to launch that vehicle in 2027.

Addressing Persistent EV Losses

Like many legacy automakers, Ford continues to post heavy losses in its EV
division. The company lost $5 billion on EV operations in 2024 alone.

Additionally, Ford expects more multibillion-dollar losses this year.
Executives point to high battery costs as a key challenge.

By taking these charges now, Ford aims to limit exposure to unprofitable
projects. As a result, management expects stronger financial performance
in future quarters.

Executives said they expect the EV business to reach profitability in 2029.

Hybrids Move to the Forefront

Ford now views hybrid technology as a central growth driver.
These vehicles combine internal combustion engines with battery systems.

By 2030, Ford expects hybrids, extended-range EVs, and fully electric
vehicles to account for 50% of global sales. Today, they represent just 17%.

For example, the Ford F-150 Lightning has been on the market since 2022.
Over time, Ford plans to convert the model into an extended-range
electric version.

This setup would use a gasoline-powered generator to charge the battery
while driving. Consequently, the truck could achieve up to 700 miles of range.

Building a Battery Storage Business

Ford plans to use factories in Kentucky and Michigan to produce batteries
for energy-storage applications. These products will target growing demand
from data centers.

In particular, the company sees opportunities tied to artificial
intelligence infrastructure.

Ford described the effort as the foundation of a new business that includes
both products and services. Therefore, the company plans to invest $2 billion
over the next two years.