Ford (F) is taking a $19.B write-down of its electric vehicle division and making a significant pivot to its EV business as the company addresses lackluster demand for electric vehicles, high costs, and changes in the regulatory environment.
“EVs just weren’t selling,” Ford CEO Jim Farley said in an interview on CNBC. “This was the right time to listen to the customer.”
The company will record the majority of the special charges in the fourth quarter of 2025 and out to 2027. At the same time, Ford (F) raised its 2025 EBIT estimate to $7B from previous guidance of $6B to $6.5B and affirmed 2025 free cash flow guidance of $2B to $3B.
As part of its strategic shift within its EV division, the company will end production of the current generation F-150 Lightning pick-up truck and pivot towards increased production of hybrids, extended range vehicles, and smaller model EVs. By 2030, Ford (F) expects ~50% of its global volume to be hybrids, extended range EVs and pure EVs, up from 17% currently.
Ford’s (F) next generation of the F-150 Lightning will shift to an extended range electric vehicle (EREV) architecture and be assembled at the Rouge Electric Vehicle Center in Dearborn, Michigan.
By increasing production of “affordable” new models, Ford expects to hire thousands of employees in the U.S. over the next few years.
Additionally, the company also announced plans to convert its Kentucky and Michigan EV battery plants into facilities to produce energy cells that can be used to power the electric grid and growing data center demand.
Following the dissolution of the Ford (F) SK On BlueOval partnership and end of the F-150 Lightning, Ford (F) took control of the two side-by-side Hardin County battery plants, one of which was built to manufacture batteries for the Lightning. Production at the second plant was put on pause amid a downturn in demand for EV batteries. Ford (F) plans to begin shipping BESS systems in 2027 with 20 GWh of annual capacity.
Ford (F) shares were jolted higher on the news, trading 2% higher in after-hours trading. Tesla (TSLA) shares were marginally lower on the news, while General Motors (GM), and Stellantis (STLA) were unchanged.