Ford Motor Company (NYSE:F) on Monday evening announced a major overhaul of its electric vehicle (EV) business, taking a $19.5 billion charge, mainly in the fourth quarter, after years of losses in its EV operations.
The automaker said it would halt production of its all-electric F-150 Lightning this month, scrap a planned North American electric van, and shift a Tennessee plant under construction to produce gas-powered trucks instead of electric pickups.
Ford also plans a next-generation extended-range Lightning, which uses a gas generator to extend battery range to over 700 miles.
“The $50k, $60k, $70k EVs just weren’t selling… An EREV that goes 700 miles on a tank of gas, for 90% of the time all-electric, is a better solution,” CEO Jim Farley told CNBC.
Ford’s EV division lost $5.1 billion last year and expects larger losses this year, but executives said the changes will make Model e operations profitable by 2029. The company raised its 2025 earnings guidance to $7 billion from a prior $6 billion to $6.5 billion, boosted by strong truck and hybrid sales.
The automaker said it will convert its Glendale, Kentucky, EV battery plant to produce lithium iron phosphate cells for stationary energy storage, a $2 billion project that will see 1,600 layoffs initially, with plans to hire 2,100 workers by 2027. Ford’s Marshall, Michigan, plant will also produce LFP cells and a new line of smaller, lower-cost EVs in 2027.
By 2030, Ford expects half of its global sales to come from hybrids, extended-range electric vehicles (EREVs), and pure EVs, up from 17% currently.
“These are big decisions that we believe will pay off for years,” Andrew Frick, head of Ford’s EV unit, said. “Rather than spending billions more on large EVs that have no path to profitability, we are allocating that money into higher-return areas.”
Shares of Ford dipped 0.3% in early trading on Tuesday.