ford is making a U-turn in its electric car strategy, writing off $19.5 billion and discontinuing several electric models.
“Instead of spending billions more on big electric cars that no longer have a path to profitability, we’re investing that money in areas with higher returns,” said Andrew Frick, head of Ford’s combustion engine and electric car division. The traditional US company from Dearborn in the state of Michigan wants to concentrate more on models with combustion and hybrid drives instead.
Focus on hybrid version
Specifically, Ford will stop producing the F-150 Lightning pickup truck as a purely electric vehicle. Instead, it will focus on producing a hybrid version with a range extender, a gasoline-powered generator that charges the battery, it said on Monday. In addition, a planned next-generation electric truck codenamed T3 and electric commercial vehicles will be canceled.
The F-150 Lightning was launched in 2022, but after an initial 200,000 orders, sales fell short. With the announcement, Ford is discontinuing virtually all of its announced second generation of electric cars and shifting the focus to more affordable electric models that are scheduled to hit the market starting in 2027.
Depreciation is also due to the canceled battery plant
The depreciation of $19.5 billion will be recorded mainly in the fourth quarter and extends until 2027. Around $8.5 billion is attributable to the canceled electric car models, around six billion to the dissolution of a battery joint venture with SK On from South Korea and five billion to other project-related expenses. While there will be layoffs in the short term at a battery plant in Kentucky, in the long term Ford plans to hire thousands of employees to produce gasoline and hybrid models. At the same time, the group raised its forecast for adjusted earnings before interest and taxes for 2025 to around seven billion dollars.
Ford’s realignment reflects this Industry reaction to a declining demand in the USA and the policies of the President’s administration Donald Trump (79). This had canceled state funding for electric cars and relaxed emissions regulations. U.S. electric car sales fell about 40 percent in November after a more than 15-year-old $7,500 consumer tax credit expired on September 30.