Ford $F is taking a $19.5 billion hit and is scrapping several electric vehicle models, as it retreats from battery-powered cars in response to weak demand and President Donald Trump’s policies.
The Michigan based automotive giant will stop making the EV version of its F-150 Lightning, and is ditching plans for an electric truck codenamed the T3, alongside other electric vans. Instead it will pivot towards hybrid models and smaller, more affordable EVs.
Ford said it expects the move to cost $19.5 billion. It is the latest example of a U.S. auto firm pulling back on vast EV investments after Trump pulled federal support for the cars and relaxed tailpipe-emissions rules, which could make it easier for carmakers to sell more gas-powered vehicles.
America bought 40% fewer EVs in November after the government support, which came in the form of a $7,500 consumer tax credit, expired. The credit had been in place for more than 15 years to encourage takeup of electric cars and vans.
The case for pushing hard on producing EVs has "eroded," Ford said in a statement, “due to lower-than-expected demand, high costs and regulatory changes.”
“This is a customer-driven shift to create a stronger, more resilient and more profitable Ford,” Jim Farley, Ford’s chief executive, said. “The operating reality has changed, and we are redeploying capital into higher-return growth opportunities.”
Ford’s pivot towards gas and hybrid models could eventually lead it to hire thousands more workers, but it is still making layoffs at a battery plans in Tennessee in the near term. The company said it expects hybrids, extended-range EVs and pure EVs to form 50% of its sales by 2030, up from 17% today.
Trump also said he would loosen fuel economy rules earlier this month. The move reversed a policy from the Biden administration that had prompted billions in investment from carmakers and raised hopes of an EV boom.
General Motors $GM also had to put EV production plans in reverse this year, which cost it $1.6 billion. Under the previous administration’s policies, in 2021, the Detroit firm had previously announced it would phase out gas and diesel cars globally by 2035, at one point planning to spend $30 billion on EVs by this year.