In a dramatic strategic reversal, Ford Motor Co. has announced a sweeping overhaul of its electric vehicle business, a move that will result in a staggering $19.5 billion in charges. The decision comes after years of the automaker struggling to turn a profit on its battery-powered models.
A Strategic Pivot Back to Hybrids and Gas
The cornerstone of Ford's new plan involves a significant shift in production priorities. The company is cancelling a planned electric F-Series truck, a highly anticipated model, and will instead redirect resources toward expanding its lineup of gasoline and hybrid vehicles. Furthermore, Ford confirmed it will convert its existing all-electric F-150 Lightning pickup into an extended-range hybrid vehicle.
Andrew Frick, head of Ford's Model e EV unit, stated that these moves are designed to make the company's electric vehicle operations profitable by 2029. The division reported a loss of $5.1 billion last year, with expectations that losses could deepen this year.
Kentucky Battery Plant Repurposed for Energy Storage
A major component of the financial charges is linked to the repurposing of a key electric vehicle battery plant. Ford is halting production at its Glendale, Kentucky, battery facility for a $2 billion conversion. The plant will be retooled to produce battery cells for energy storage systems, which are in high demand to support power grids and the booming energy needs of AI data centers.
The conversion will lead to the layoff of the plant's 1,600 workers during the transition. However, Ford plans to hire approximately 2,100 people to support its burgeoning energy storage business when the facility reopens in 2027. This shift follows the recent dissolution of Ford's joint venture with South Korean battery maker SK On for the Kentucky plants.
Broader Industry Trends and Financial Outlook
Ford CEO Jim Farley explained the decision, citing a changed operating reality. "We are redeploying capital into higher-return growth opportunities," Farley said in a statement. The company's strategic shift is partly a response to shifting political and consumer landscapes. Farley has previously predicted a potential drop in consumer demand for plug-in vehicles following policy changes in the United States.
Despite the massive charges, Ford raised its 2025 financial guidance. The automaker now expects earnings before interest and taxes to reach $7 billion, up from a prior estimate of $6 billion to $6.5 billion. Ford's move mirrors challenges across the industry; rival General Motors Co. took a $1.6 billion charge in October to write down EV assets.
The pivot toward energy storage highlights a promising alternative for automakers' battery investments. Utility-scale battery storage capacity in the U.S. surged by 50% in the first ten months of 2025, driven by critical upgrades to aging power infrastructure and the insatiable energy demands of new technology.
