Ford Motor Company announced a projected $19.5 billion in special items tied to a restructuring of its business strategies and a reduction in investment in all-electric vehicles (EVs). The majority of these charges will be recorded in the fourth quarter, with an additional $5.5 billion expected to be incurred by 2027, primarily in cash payments next year. Despite these financial adjustments, Ford indicated that it would raise its guidance for adjusted earnings before interest and taxes to approximately $7 billion for 2025, aligning with earlier goals despite a prior reduction in expectations.
The adjustments, including $8.5 billion in write-downs related to EV assets, reflect significant shifts in Ford’s business focus. The automaker plans to pivot investments toward hybrid vehicles and smaller, more affordable EVs, instead of pursuing a next generation of larger all-electric trucks. Under the leadership of CEO Jim Farley, the company’s “Ford+” restructuring initiative has evolved since its inception as an EV growth strategy in 2021. Farley emphasized the importance of adapting to current market demands rather than predictions.
The transition comes at a time when EV sales have slowed domestically, partly due to the cessation of a federal tax credit for EV buyers. Additionally, Ford will modify its all-electric F-150 Lightning pickup to include an electric powertrain alongside a gas generator. The company forecasts robust hybrid and electric vehicle sales, projecting that these will represent about 50% of its global volume by 2030, up from 17% in 2025.
Ford’s focus will also shift to a new low-cost, flexible Universal EV Platform, designed for a future range of smaller, efficient electric vehicles. The first of these models, a midsize pickup truck, is set to be produced at the Louisville Assembly Plant starting in 2027.
Key Points:
- Why this story matters: The restructuring signals a strategic shift in Ford’s approach to EV development, reflecting broader trends in the automotive industry.
- Key takeaway: Ford aims to enhance profitability through a focus on hybrids and affordable EVs while reducing its reliance on high-end all-electric models.
- Opposing viewpoint: Critics may argue that the retreat from all-electric investments could hinder Ford’s competitiveness in an increasingly electric market.
