Ford Motor is resetting its electric vehicle strategy after taking a $19.5 billion impairment charge, one of the largest EV-related writedowns by a global automaker.
This comes amid weaker-than-expected demand for battery-powered vehicles and a shift in U.S. policy that has reduced federal support for EVs and eased emissions rules.
The charge will be spread over several years, with most of it recognized in the fourth quarter and continuing through 2027. About $8.5 billion relates to the cancellation of planned EV models, around $6 billion to the exit from a battery joint venture with South Korea’s SK On, and roughly $5 billion to other program-related costs. On a cash basis, Ford expects an impact of about $5.5 billion, mainly in 2026 and 2027.
Morgan Stanley analysts describe the move as a “reset” rather than a retreat from electrification. Analysts say Ford is scaling back parts of its EV footprint while shifting focus to vehicles with better returns, including trucks, hybrids and extended-range electric vehicles (EREVs).
Brokerage sees the impairment as a step to right-size the business and align production more closely with consumer demand.
With the writedown, Ford bumped its 2025 adj. EBIT guidance to about $7 billion, up from a previous range of $6 billion to $6.5 billion. This is higher than both Morgan Stanley’s and the broader consensus estimate of $6.3 billion.
The company also said adjusted free cash flow is now expected to trend toward the higher end of its $2 billion to $3 billion target range.
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads. Ford’s updated product roadmap places greater emphasis on hybrids and gas-powered vehicles. Production of the current F-150 Lightning has ended, with focus shifting to a next-generation F-150 Lightning EREV.
New “Built Ford Tough” pickups will be made at the BlueOval facility in Tennessee, while new gas and hybrid vans will be produced in Ohio. The company is targeting 50% of global volumes from hybrids, EREVs and full EVs by 2030, up from about 17% today.
A notable new element of the strategy is Ford’s entry into the energy storage market. The company plans to invest $2 billion to convert plants in Kentucky and Michigan to produce energy storage systems, with shipments expected to begin in 2027.
Morgan Stanley estimates that if Ford reaches a 20 GWh annual run rate, the business could generate $4 billion to $5 billion in additional revenue, though margins remain uncertain.
Ford now expects its Model e EV business to reach profitability by 2029, earlier than previous expectations.
Experts say execution will be critical, but views the reset as a clearer path toward improving profitability and restoring investor confidence.
