DETROIT — Ford engine expects to record approximately $19.5 billion in special items related to a restructuring of its business priorities and a withdrawal of its investments in fully electric vehicles, the company announced Monday.
The Detroit automaker said most of those charges would come during the fourth quarter. That will be followed by $5.5 billion in cash that will be billed through 2027, and the majority of that will be paid next year, Ford said.
These charges will have an impact on the automaker’s bottom line but not on its adjusted profit. The automaker said Monday it was raising its forecast for adjusted earnings before interest and taxes to around $7 billion in 2025. That’s in line with its target from earlier this year, before the company lowered its forecast for adjusted EBIT to between $6 billion and $6.5 billion in October.
The charges announced Monday, including $8.5 billion in writedowns of electric vehicle assets, are linked to major changes in Ford’s business plans.
The new plans include a refocusing of investments on hybrid vehicles, including plug-in models rather than pure electric vehicles; cancel a next generation of large, all-electric trucks in exchange for smaller, more affordable electric vehicles; and a rebalancing of its investments in core products such as trucks and SUVs.
The changes are the latest under Ford CEO Jim Farley and his “Ford+” restructuring plan, which has taken many different forms since he initially announced it as a plan for electric vehicle growth in 2021.
“We evaluated the market and we made the decision,” Farley said Monday on CNBC’s “Closing Bell Overtime.” “We follow our clients to where the market is, not where people thought it was going to be, but where it is today.”
Ford, GM and Stellantis stocks.
The electric vehicle segment saw a decline in sales nationally after the Trump administration prematurely ended in September the $7,500 federal tax credit previously available to electric vehicle buyers in the United States.
Farley said on CNBC that politics “wasn’t the only reason we made this choice,” but he acknowledged it played a role.
Ford also announced Monday that its all-electric F-150 Lightning pickup truck would transition to an extended-range electric vehicle, or EREV, which includes an electric powertrain as well as a gas-powered generator, and announced plans to use battery factories in Kentucky and Michigan for a new stationary energy storage business.
“The last two months have been very clear for us,” Farley told CNBC’s Phil LeBeau. “The very high-end electric vehicles – the $50,000, $70,000, $80,000 vehicles – just weren’t selling.”
Ford said the changes should 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 at its traditional Ford Blue unit and its Ford Pro commercial and fleet businesses “over time, with first signs of benefits in 2026.”
The automaker said it expects about 50% of its global volume by 2030 to be hybrids, EREVs and fully electric vehicles, up from 17% in 2025.
“These are important decisions that we believe will pay off for years to come for our customers, our employees, jobs and American industry,” Andrew Frick, president of Model e and Blue, said on a media call Monday. “Ford follows the customer. We look at the market as it is today, not as everyone predicted it five years ago.”
Ford said it will focus its electric vehicle development in North America on its new, flexible and low-cost universal electric vehicle platform, which is expected to support a “high-volume family of smaller, highly efficient and affordable electric vehicles.”
The first vehicle on the new platform will be a “fully connected mid-size pickup truck” assembled at the company’s Louisville assembly plant starting in 2027.
The company also expects its new storage business to produce and ship units by 2027 for things like “data centers, the power grid and much more,” Frick said.
“It’s an interesting opportunity. It’s a market with huge potential and high demand,” he said. “We will have 20 gigawatt hours of annual capacity for this market.”
Ford shares rose about 2% after hours Monday.
Ford shares closed Monday at $13.65, down less than 1%. Ford stock as of Monday’s close was up nearly 40% this year.