Ford (F) announced a series of moves in its EV business, pivoting to a hybrid and extended-range EV (EREV) strategy instead of full EVs. The company will take a whopping $19.5 billion in charges related to the move. Ford canceled the Lightning EV pickup in its existing form, and the company said it would shift battery production to other areas.
“The operating reality has changed, and we are redeploying capital into higher-return growth opportunities: Ford Pro, our market-leading trucks and vans, hybrids, and high-margin opportunities like our new battery energy storage business,” Ford CEO Jim Farley said in a statement.
Ford will concentrate its North American EV development on its new, low-cost, flexible Universal EV Platform used for smaller, more efficient EVs designed to tap into a broader range of customers. The first vehicle from the Universal EV Platform will be the fully connected midsize pickup truck assembled at its Louisville Assembly Plant starting in 2027.
As part of this plan, the next iteration of the F-150 Lightning will shift to an EREV architecture and be assembled at the Rouge Electric Vehicle Center in Dearborn, Mich. EREVs are essentially EVs that use an onboard gas engine as a generator to charge the vehicle’s batteries.
Ford said production of the current generation F-150 Lightning has concluded, as the company redeploys employees to the Dearborn Truck Plant to support a third crew for F-150 gas and hybrid truck production. The Novelis aluminum plant fires impacted gas-powered F-150 production, prompting the shift.
Ford will convert its Tennessee Electric Vehicle Center into the Tennessee Truck Plant, where it will build new gas-powered Ford truck models in 2029.
Ford’s Ohio Assembly Plant will become a “central hub” for Ford Pro, assembling a new gas and hybrid commercial van in 2029 (replacing a planned EV van), and Super Duty truck chassis cabs.
By 2030, Ford expects approximately 50% of its global volume will be hybrids, extended-range EVs, and fully electric vehicles, up from 17% in 2025.
Ford declined to say what percentage of its sales would be EREVs, EVs, and hybrids by 2030.
Ford will launch an all-new battery energy storage system business, repurposing existing EV battery plants in Kentucky and Michigan instead of letting excess capacity sit idle, the company said.
“It just made a lot of sense as a natural adjacency for us,” said Lisa Drake, Ford vice president of technology platforms, on a call with reporters. Drake also said grid-scale utility customers and data center providers were potential customers.
Drake noted the predominant opportunity is for commercial customers, but the smaller batteries made at its Marshall, Mich., battery plant could be used for residential customers.
Last week, Ford announced that a subsidiary would now fully own and operate the two battery plants in Kentucky that it operated with SK On as part of a joint venture, but that SK On would now fully own and operate a Tennessee battery plant that was part of the venture.
Financial implications from Ford’s pivot
The financial impact of these strategy changes will be massive. While Farley said these moves were needed to address customer needs and make Ford more “profitable,” it was his and the board’s move to aggressively pursue an EV strategy.
Ford now expects to record about $19.5 billion in special items, with the majority recognized in the fourth quarter ($12.5 billion) and balance ($7.0 billion) hitting in 2026 and 2027.
Inclusive of the $19.5 billion are cash charges of $5.5 billion related to vehicle cancellations and charges, with the majority paid in 2026 and the remainder in 2027, Ford said.
The asset impairment portion of the writedown is $8 billion, which includes a writedown of EV assets, as well as $6 billion related to restructuring and taking on assets like the Kentucky battery plants from Ford’s battery partner SK ON, CFO Sherry House said on a call with reporters.
Special items aside, Ford raised its 2025 adjusted EBIT guidance to about $7 billion, “given continued underlying business strength, including cost improvement,” an improvement from the $6 billion to $6.5 billion it previously saw, which was a cut from the $6.5 – $7.5 billion seen before the Novelis fires.
Ford reaffirmed its adjusted free cash flow guidance range, seen at the high end of a range of $2 billion to $3 billion.
