:max_bytes(150000):strip_icc()/GettyImages-2252102707-5168893c4cb94a34b1827acdffdb70c2.jpg "Ford Is Rolling Back Some of Its EV Plans. Here’s What You Need to Know")
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Key Takeaways
- Ford is pulling back on parts of its EV strategy as the automaker says it is looking to respond to consumer preferences.
- The automaker said it expects to take on about $19.5 billion in one-time charges as part of a restructuring.
Ford’s (F) electric vehicle strategy is changing gear.
The automaker announced a major shift in its EV plans late Monday, with the company expecting to take on about $19.5 billion in one-time charges to account for the costs of a restructuring plan that will see the automaker focus more on hybrid and plug-in vehicles, while pulling away from pure EVs. Ford said it plans to recognize most of the $19.5 billion in charges during the fourth quarter, with about $5.5 billion in cash effects to be paid through 2027.
“This is a customer-driven shift to create a stronger, more resilient and more profitable Ford,” Ford CEO Jim Farley said in a statement. “The operating reality has changed, and we are redeploying capital into higher-return growth opportunities.”
The next generation of Ford’s F-150 Lightning electric truck will now be an extended-range EV rather than a fully electric vehicle. Ford said its plans to start introducing smaller, more efficient and affordable EVs remain on track for 2027.
Why This Is Significiant
Ford is the latest automaker to scale back parts of its electric vehicle plans, in what could underscore a broader trend as demand in the U.S. has fallen amid concerns about costs with the expiration of EV tax credits, and charging infrastructure, among other things.
Ford said its electric vehicle unit should be profitable by 2029 after making these changes, and that some of its battery-producing plants will shift to making stationary batteries for homes, businesses, and data centers.
General Motors (GM) and other automakers have made changes to their EV plans as well in recent months, anticipating a drop in demand after a $7,500 EV tax credit expired at the end of September. Automakers are also facing less pressure to shift to more sustainable vehicles, as the Trump administration has loosened emissions requirements.
Ford said it expects that by 2030, about half of its vehicle lineup will be made up of a combination of hybrids, EVs, or extended-range EVs, compared to about 17% of its lineup today.
Ford shares were little changed in recent trading. They have gained nearly 40% since the start of the year.
