Ask Onix
Ford pivots away from large electric vehicles
US automaker Ford announced on Monday it will abandon plans to produce large electric vehicles (EVs), citing sluggish demand and recent regulatory rollbacks under the Trump administration.
Strategic shift to hybrids and smaller EVs
Instead of focusing on large EVs, Ford will redirect investments toward profitable hybrid and gasoline-powered models, as well as more affordable electric vehicles. The company expects the move to result in a $19.5 billion (£14.6 billion) hit to its profits.
Ford CEO Jim Farley described the decision as a "customer-driven shift to create a stronger, more resilient and more profitable Ford."
"The operating reality has changed, and we are redeploying capital into higher-return growth opportunities,"
Jim Farley, Ford CEO
Key changes to Ford's EV lineup
The company will cancel its planned all-electric version of the F-150 pickup truck, opting instead to redesign the F-150 Lightning as a hybrid with a gasoline-powered generator. Ford will also scrap its new electric van project to prioritize gas and hybrid models.
Industry-wide slowdown in EV adoption
Ford's decision follows a similar move by General Motors in October, which scaled back its EV ambitions and took a $1.6 billion financial hit due to weakening demand. EV adoption in the US has lagged behind markets like China, the UK, and Europe, where government support has been stronger.
Analysts attribute the slowdown to reduced incentives, including the expiration of a $7,500 (£5,608) federal tax credit for electric vehicles in September. Ford's Farley previously warned that the EV market would be "smaller, way smaller than we thought" without such subsidies.
Regulatory rollbacks under Trump administration
The Trump administration recently eased fuel economy standards, reversing a Biden-era policy aimed at reducing carbon emissions. The Biden rules were projected to prevent over 700 million metric tons of CO₂ emissions by 2050.
Farley praised the regulatory changes as a "victory of common sense," though environmental groups criticized them as a setback for climate goals. He added that the new standards align with "customer demand."
Global shifts in EV policies
The US policy shift comes as the European Union prepares to soften its 2035 plan to phase out new combustion engine cars. Germany has pushed for revisions, arguing that its automakers face intense competition from Chinese rivals.
The European Commission is set to announce its decision on Tuesday.
