Ford has announced a major overhaul of its electric vehicle business after years of trying unsuccessfully to make it profitable.
The strategic shift will impact $19.5 billion in costs, most of it in the fourth quarter, Ford said in a statement on Monday. As part of the plan, the automaker canceled production of the F-Series electric pickup truck, will focus on manufacturing gasoline and hybrid vehicles, and will transform a battery factory for electric vehicles.
In addition, Ford will transform its F-150 Lightning electric pickup truck into a hybrid model with greater autonomy.
These moves should see Ford’s electric vehicle division, called Model e, begin turning a profit by 2029, EV chief Andrew Frick said in an interview. Last year, Ford had a loss of US$5.1 billion in this division and expects losses to be even greater this year.
“Reality has changed, and we are redirecting investments to areas with higher returns,” said CEO Jim Farley.
The company also revised upward its profit forecast for 2025, which is now $7 billion before interest and taxes, up from the previous estimate of $6 to $6.5 billion.
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Farley believes demand for plug-in vehicles will fall by half after former President Donald Trump reversed many of the Biden administration’s policies. As a result, automakers are looking for ways to minimize the losses caused by idle factories. In October, General Motors had already recorded a cost of US$1.6 billion to write down its electric vehicle assets.
One of the most promising alternatives is to transform battery factories for electric vehicles into units that produce cells for energy storage, a market that is growing with the increase in artificial intelligence data centers and the need to modernize the electrical grid. According to preliminary data from the US Energy Information Administration, battery storage grew 50% in the first 10 months of this year, reaching almost 39.3 gigawatts.
These storage cells help to make better use of the current electrical grid, as it is not possible to build new plants quickly enough to meet the demand of large data centers, which consume energy equivalent to entire cities.
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For this business, which requires a lot of investment and technology, to be profitable, manufacturers argue that tax credits for production are essential.
Ford will halt production at its electric vehicle battery plant in Glendale, Kentucky, which will undergo a $2 billion transformation to produce energy storage cells for the electric grid. The factory’s 1,600 employees will be laid off during the renovation, but the company plans to hire 2,100 people for the new business when the site reopens in 2027.
The automaker also took control of two battery plants in Glendale after the end of its partnership with South Korea’s SK On. Only one of those plants is operating, and Ford will switch production to cheaper lithium iron phosphate (LFP) batteries using a deal with China’s Contemporary Amperex Technology Co. Ltd. Those batteries will be sold exclusively for energy storage.
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The Marshall, Michigan plant will also produce LFP batteries for storage, as well as a new line of small, cheaper electric vehicles, scheduled for 2027.
Ford plans to convert a plant under construction in Stanton, Tennessee — its first new plant in 50 years — to make gasoline trucks rather than all-electric pickup trucks. The plant will produce a new model, which is not yet part of the automaker’s current lineup. The opening of the factory was postponed until 2029, a year later than expected.
The majority of the $19.5 billion in special costs will be accounted for in fourth-quarter earnings, with the remainder in 2026 and 2027. The company expects a cash impact of about $5.5 billion, which will be paid primarily next year.
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Ford predicts that, by 2030, half of global sales will be hybrids, electric vehicles with greater range and pure electric vehicles, compared to 17% currently.
“These are important decisions that we believe will pay off for years to come,” Frick said. “Instead of spending billions on big electric vehicles that have no path to profitability, we are investing in areas with greater returns.”
© 2025 Bloomberg L.P.
