Detroit — ford motor expects to record approximately $19.5 billion in special items related to realigning business priorities and reducing investment in fully electric vehicles, the company announced Monday.
The Detroit automaker said most of these charges will occur during the fourth quarter. Ford then said $5.5 billion in cash would be requested through 2027, with most of it paid next year.
This charge affects the automaker’s net results, but not its adjusted profits. The automaker announced Monday that it is raising its outlook for adjusted earnings before interest and taxes in 2025 to about $7 billion. This is in line with its target earlier this year, before the company lowered its adjusted EBIT forecast to between $6 billion and $6.5 billion in October.
The charges announced Monday include an $8.5 billion writedown on EV assets and are related to significant changes to Ford’s business plan.
The new plan includes refocusing investment on hybrid vehicles, including plug-in models, rather than pure EVs. It will discontinue production of the next generation of heavy-duty all-electric trucks and introduce smaller, more affordable EVs. and rebalancing investments in core products such as trucks and SUVs.
The changes are the latest under Ford CEO Jim Farley’s “Ford+” restructuring plan, which has taken various forms since he first announced it as his 2021 EV growth plan.
“We evaluated the market and made a decision,” Farley said Monday on CNBC’s “Closing Bell Overtime.” “We’re following our customers to where the market is today, not where people thought the market would be.”
Ford, GM, and Stellantis stocks.
The EV segment has suffered a domestic sales slump since the Trump administration prematurely ended in September the $7,500 federal tax credit previously available to U.S. EV buyers.
Farley said on CNBC that policy was “not the only reason I made this choice,” but acknowledged that policy played a role.
Ford also announced Monday that its F-150 Lightning all-electric pickup truck will be transitioning to an extended range electric vehicle (EREV), which includes an electric powertrain and gas-powered generator, and plans to use battery plants in Kentucky and Michigan for new stationary energy storage operations.
“The last few months have been really clear for us,” Farley told CNBC’s Phil LeBeau. “Very high-end EVs, $50,000, $70,000, $80,000 cars, weren’t selling.”
Ford said the changes are expected to provide a “path to profitability” for its Model E electric vehicle business by 2029, with a goal of annual improvements starting in 2026. The automaker also said it expects the changes to improve profits in its traditional Ford Blue division and Ford Pro commercial and fleet businesses with “initial signs of impact over time in 2026.”
The company said it expects about 50% of global sales to be hybrid, electric and fully electric vehicles by 2030, up from 17% in 2025.
“These are big decisions that we believe will pay off for our customers, our employees, American jobs and manufacturing for years to come,” Andrew Frick, president of Model E and Blue operations, said on a media conference call Monday. “Ford is chasing customers. We’re looking at the market today, not the market anyone predicted five years ago.”
Ford said it will focus its electric vehicle development in North America on a new low-cost, flexible universal EV platform that is expected to support “a high-volume family of smaller, more efficient and affordable electric vehicles.”
The first vehicle based on the new platform will be a fully connected mid-size pickup truck that will be assembled at the company’s Louisville Assembly Plant starting in 2027.
The company also has a new storage business that will allow it to produce and ship units for “data centers, power grids, etc.” by 2027, Frick said.
“This is an attractive opportunity. It’s a market with great potential and strong demand,” he said. “We will have 20 gigawatt-hours of capacity per year in this market.”
Ford shares rose about 2% in after-hours trading Monday.
Ford shares closed Monday at $13.65, down less than 1%. As of Monday’s close, Ford stock had risen nearly 40% since the beginning of the year.
