Ford said it is pulling back from plans to manufacture large electric vehicles, citing weaker demand and recent regulatory changes under U.S. President Donald Trump, and will redirect investment toward hybrids, gas-powered vehicles, and smaller electric models.
Shift Away From Large Electric Vehicles
The U.S. carmaker said on Monday that it will no longer pursue the production of large EVs, stating that the business case for those models has weakened. Ford said the shift is expected to reduce profits by $19.5 billion, or £14.6 billion.
In a statement, the company said the case for leaning heavily into large EV production had “eroded” due to lower-than-expected consumer demand, high costs, and regulatory changes. The announcement follows moves by the Trump administration to ease fuel economy rules.
“This is a customer-driven shift to create a stronger, more resilient and more profitable Ford,” chief executive Jim Farley said. He added that the company is reallocating capital toward higher-return areas including trucks, vans, hybrid vehicles, and its energy storage business.
Changes to Key Vehicle Models
As part of the revised strategy, Ford said it will no longer produce a fully electric version of its F-150 pickup truck. The F-150 Lightning will instead be redesigned as a hybrid model that includes a gas-powered generator.
The company also said it will cancel a planned new electric van, choosing instead to focus on gas-powered and hybrid commercial vehicles.
Broader Industry Pullback on EVs
Ford’s decision follows a similar move by General Motors, which said in October that it would take a $1.6 billion hit as it scaled back its electric vehicle plans amid weakening demand.
Electric vehicle adoption in the United States has lagged behind markets such as China, the United Kingdom, and parts of Europe. Analysts have pointed to comparatively limited government support for EVs in the U.S. as a contributing factor.
Impact of Policy Changes Under Trump
Recent policy changes have altered the outlook for EV growth. A federal subsidy that previously reduced the cost of certain battery electric, plug-in hybrid, and fuel cell vehicles by up to $7,500, or £5,608, ended in September.
Carmakers had anticipated slower EV growth following the end of the tax credit. At the time, Farley said the EV industry would be “smaller, way smaller than we thought.”
Earlier this month, Trump announced plans to loosen fuel economy standards, reversing a Biden-era policy that had aimed to cut more than 700 million metric tons of carbon dioxide emissions by 2050. Farley welcomed the change, calling it a “victory of common sense,” while environmental groups criticized the move as harmful to public health and climate goals.
Farley said the revised standards were aligned with customer demand.
International Context
The policy shift in the U.S. comes as the European Union is expected to soften its plan to effectively ban the sale of new combustion engine cars from 2035. Germany has pushed for changes, citing pressure on its carmakers from competitors in China.
The European Commission is scheduled to announce its decision on the proposal on Tuesday.
Featured image credits: Tony Webster via Wikimedia Commons
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