Ford to Take $19.5 Billion in Charges Tied to Sweeping EV Unwind

A Ford dealership in Richmond, California. Photo by David Paul Morris /Bloomberg

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(Bloomberg) — Ford Motor Co. announced a sweeping overhaul of its electric vehicle business after struggling for years to make it profitable.

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The strategic shift will result in $19.5 billion in charges, the majority of which will come in the fourth quarter, Ford said Monday in a statement. As part of the plan, the automaker is canceling a planned electric F-Series truck, shifting production toward gas and hybrid vehicles and repurposing an EV battery plant.

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Ford will also convert its signature electric F-150 Lightning pickup into an extended-range hybrid vehicle.

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The moves will make Ford’s Model e EV operations profitable by 2029, Andrew Frick, head of the EV unit, told reporters in a briefing. Ford lost $5.1 billion in its EV division last year and expects losses could be worse this year.

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“The operating reality has changed, and we are redeploying capital into higher-return growth opportunities,” Ford Chief Executive Officer Jim Farley said in a statement.

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The automaker boosted its 2025 guidance to $7 billion before interest and taxes, up from a prior estimate of $6 billion to $6.5 billion.

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Farley has predicted consumer demand for plug-ins will fall by half after President Donald Trump ripped up most of Joe Biden’s policy platform. Now companies are trying to find ways to limit the financial damage caused by idle plants. In October, General Motors Co. took $1.6 billion in charges to write down EV assets.

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One of the most promising options is converting EV battery plants to produce cells for stationary storage, where demand is booming thanks to growth in AI data centers and needed upgrades to the power grid. Utility-scale battery storage rose 50% during the first 10 months of this year to nearly 39.3 gigawatts from the end of 2024, US Energy Information Administration preliminary data show. 

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Storage cells can eke out more usage from the existing grid because big new power plants can’t be built fast enough to serve data campuses that use as much power as cities.  

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But to make a profit on the capital-intensive, technically challenging business of cell-making, manufacturers have argued that manufacturing tax credits are critical to make the plants economically viable.

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Ford is halting production at its Glendale, Kentucky, electric vehicle battery plant, which will undergo a $2 billion conversion to produce cells for energy storage to power the electric grid. The plant’s 1,600 workers will be laid off during the conversion, but Ford plans to hire 2,100 people to support its energy storage business when the facility reopens in 2027.

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The automaker is taking control of side-by-side battery plants in Glendale, Kentucky, following the break-up last week of a joint venture with South Korean battery maker SK On. Just one of those plants is operating and Ford will switch its output to the lower cost lithium iron phosphate cells utilizing a licensing agreement it has with Chinese battery maker Contemporary Amperex Technology Co. Ltd. Those batteries will be sold solely for energy storage.