Ford to Suffer $19.5 Billion Hit Tied to EV Reduction
Ford Kentucky EV Battery Plant Will Become Facility to Produce Cells for Energy Storage; All 1,600 to Be Laid Off for Conversion
Key Takeaways:
- Ford will take $19.5 billion in charges, mostly in the fourth quarter, as it overhauls its EV strategy by canceling a planned electric F-Series truck and shifting toward gas and hybrid vehicles.
- The automaker said the charges reflect years of EV losses, including $5.1 billion last year, excess battery capacity and weaker demand worsened by policy changes under President Donald Trump.
- Ford expects the moves to make its Model e EV unit profitable by 2029, boost 2025 earnings guidance to $7 billion and pivot battery plants toward energy storage and lower-cost technologies.
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Ford Motor Co. will take $19.5 billion in charges tied to a sweeping overhaul of its electric vehicle business after struggling for years to make it profitable.
The majority of the charges will come in the fourth quarter, Ford said in a Dec. 15 statement. As part of the strategic shift, the automaker is canceling a planned electric F-Series truck, shifting production toward gas and hybrid vehicles and repurposing an EV battery plant.
Ford will also convert its signature electric F-150 Lightning pickup into an extended-range hybrid vehicle.
The magnitude of asset impairments and write-downs are a testament both to the degree of difficulty Ford has had trying to profitably build and sell EVs, and the extent to which President Donald Trump’s policy changes will only exacerbate those challenges.
In taking the charges, Ford is acknowledging it built far too much battery production capacity and was going down a dead end with large EVs that were destined to lose more money.
The moves will make Ford’s Model e EV operations profitable by 2029, Andrew Frick, head of the EV unit, told reporters in a briefing. Ford lost $5.1 billion in its EV division last year and expects losses could be worse this year.
“The operating reality has changed, and we are redeploying capital into higher-return growth opportunities,” Ford CEO Jim Farley said in a statement.
The automaker boosted its 2025 guidance to $7 billion before interest and taxes, up from a prior estimate of.
Ford shares rose 1% in extended New York trading at 4:37 p.m. The stock had risen 38% so far this year.
Farley has predicted consumer demand for plug-ins will fall by half after Trump ripped up most of former President Joe Biden’s policy platform. Now companies are trying to find ways to limit the financial damage caused by idle plants. In October, General Motors Co. took$1.6 billion in chargesto write down EV assets.
One of the most promising options is converting EV battery plants to produce cells for stationary storage, wherethanks to growth in AI data centers and needed upgrades to the power grid. Utility-scale battery storage rose 50% during the first 10 months of this year to nearly 39.3 gigawatts from the end of 2024, Energy Information Administration preliminary data shows.
Storage cells can eke out more usage from the existing grid because big new power plants can’t be built fast enough to serve data campuses that use as much power as cities.
But to make a profit on the capital-intensive, technically challenging business of cell-making, manufacturers havethat manufacturing tax credits are critical to make the plants economically viable.
Ford is halting production at its Glendale, Ky., electric vehicle battery plant, which will undergo a $2 billion conversion to produce cells for energy storage to power the electric grid. The plant’s 1,600 workers will be laid off during the conversion, but Ford plans to hire 2,100 people to support its energy storage business when the facility reopens in 2027.
The automaker is taking control of side-by-side battery plants in Kentucky, following the breakup last week of a joint venture with South Korean battery maker SK On. Just one of those plants is operating, and Ford will switch its output to the lower-cost lithium iron phosphate cells utilizing a licensing agreement it has with Chinese battery maker Contemporary Amperex Technology Co. Those batteries will be sold solely for energy storage.
Its Marshall, Mich., plant will now also build LFP cells for energy storage as well as a new line of small, lower-cost EVs coming in 2027.
Ford plans to converta factory under construction in Stanton, Tenn., — its first new assembly plant in half a century — to build gas-powered trucks rather than pure electric pickups. The Tennessee truck plant will build a new model that’s not currently in the automaker’s lineup of small, medium and large pickups, the company said. Ford delayed the startup of that factory to 2029, from a previous plan to open in 2028 — which had been previously pushed back.
The company said the majority of the $19.5 billion in special items will be recognized in its fourth-quarter earnings, with the remainder in 2026 and the following year. The company expects about $5.5 billion of cash impact from the charges, paid primarily next year.
Ford said that by 2030, it expects half of its global sales volume will come from hybrids, extended range electric vehicles and pure EVs, up from 17% now.
“These are big decisions that we believe will pay off for years,” Frick said. “Rather than spending billions more on large EVs that now have no path to profitability, we are allocating that money into higher-returning areas.”
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