In perhaps the most dramatic example yet of US automakers' move away from electric vehicles (EVs) in response to the Donald Trump administration's policies, Ford Motor on Monday announced that it was killing several battery-powered models, taking a $19.5 billion writedown in the process.
As per a report by Reuters, the Michigan-based company announced the discontinuation of its F-150 Lightning car in its EV form, adding that it would pivot to making an extended-range electric model, a type of hybrid vehicle called EREV.
Further, Ford is also scrapping a next-generation electric truck, as well as electric commercial vans that had been planned, effectively marking the end of the line of its announced second-generation EV line-up.
Marking a departure from purely electric vehicles, Ford said that it would now focus on gas and electric hybrids, and projected generating thousands of jobs eventually as a result of the pivot.
The company, however, said there will be some layoffs at a jointly owned battery plant based in Tennessee in the near-term.
“Rather than spending billions more on large EVs that now have no path to profitability, we are allocating that money into higher-returning areas," Andrew Frick, the head of Ford’s gas and electric-vehicle operations was quoted as saying by Reuters.
The cost of policy compliance
Ford's $19.5 billion writedown has two primary components—losses emanating from the cancellation of EV models, costs tied to the dissolution of the Tennessee battery plant with South Korea's SK On.
While scrapping EV models is expected to cost the company $8.5 billion, Ford expects the dissolution to cost another $6 billion.
In addition, the company expects to incur another $5 billion in "program-related expenses", as per Reuters.
Ford further said that it would spread out the nearly-$20 billion write down, taken primarily in the fourth quarter and continuing through next year and into 2027.
Dropping EV sales, Trump's policy push
Ford's move comes at amid a sharp decline in sales of EVs in the US.
In November alone, EV sales fell about 40%, on the back of the 30 September expiration of $7,500 consumer tax credit for those looking to purchase EVs. The tax credit had been in place for more than 15 years to stoke demand for EVs and achieve energy transition goals.
Beyond pulling federal support for EVs, Trump has also eased tailpipe emissions rules by putting a freeze on fines that automakers pay for violating fuel-economy regulations, something which is likely to encourage producers to sell more fossil fuel-powered cars.
