Ford to spend ₹1.77 lakh crore to cancel EV models; shift back to ICE, hybrid cars
In a shocking move, Ford has announced a massive $19.5-billion (about ₹1.77 lakh crore) charge on electric-vehicle investments, marking a significant shift in the company’s strategy. The decision comes as a surprise, given the automotive industry’s increasing focus on electric vehicles (EVs) and the pressure to reduce carbon emissions. However, it appears that Ford is taking a step back from its EV ambitions, at least for the time being.
The $19.5-billion charge is a substantial amount, and it’s tied to several factors. A significant portion, $8.5 billion, is attributed to the costs associated with killing future EV models. This move suggests that Ford is reassessing its electric vehicle lineup and has decided to cancel several models that were in the pipeline. The decision is likely due to the high development costs and the uncertainty surrounding the demand for electric vehicles.
Another $6 billion is tied to a now-cancelled battery operation joint venture (JV) with South Korea’s SK On. The JV was announced in 2021, with the goal of developing and manufacturing battery cells for Ford’s electric vehicles. However, it seems that the partnership has not worked out as planned, and Ford has decided to cancel the project. The $6 billion charge is a significant write-down, and it highlights the risks and challenges associated with developing and manufacturing electric vehicle batteries.
In addition to the cancellations and write-downs, Ford is also converting its flagship electric truck-manufacturing factory in Tennessee to produce models with internal combustion engines (ICE) and hybrid engines. The factory, which was initially designed to produce electric vehicles, will now be repurposed to manufacture a range of powertrains, including ICE and hybrid engines. This move suggests that Ford is shifting its focus back to traditional powertrains, at least in the short term.
The decision to shift back to ICE and hybrid engines is likely driven by several factors. One reason could be the uncertainty surrounding the demand for electric vehicles. While many countries have set ambitious targets for electric vehicle adoption, the reality is that the demand for EVs is still relatively low. Additionally, the development and manufacturing costs for electric vehicles are high, and the profitability of EVs is still a challenge for many automakers.
Another reason for Ford’s decision could be the regulatory environment. While many countries have implemented policies to encourage the adoption of electric vehicles, there are still many uncertainties surrounding the regulatory framework. The lack of clarity on regulations and incentives could be making it difficult for Ford to justify the investment in electric vehicles.
The implications of Ford’s decision are significant. The move could be seen as a setback for the electric vehicle industry, which has been gaining momentum in recent years. However, it’s also possible that Ford’s decision could be a strategic move to focus on more profitable areas of the business. By shifting its focus back to ICE and hybrid engines, Ford may be able to reduce its development costs and improve its profitability in the short term.
It’s also worth noting that Ford’s decision does not necessarily mean that the company is abandoning its electric vehicle ambitions entirely. The company may still be working on electric vehicle projects, but it’s likely that the pace of development will be slower than previously anticipated. Additionally, Ford may be exploring alternative technologies, such as hybrid engines, which could offer a more cost-effective and efficient solution for reducing emissions.
In conclusion, Ford’s decision to spend ₹1.77 lakh crore to cancel EV models and shift back to ICE and hybrid cars is a significant move that highlights the challenges and uncertainties surrounding the electric vehicle industry. While the decision may be seen as a setback for the industry, it’s also possible that it could be a strategic move to focus on more profitable areas of the business. As the automotive industry continues to evolve, it will be interesting to see how Ford’s decision plays out and how it will impact the company’s future prospects.
News Source: https://www.reuters.com/business/autos-transportation/fords-195-billion-ev-writedown-five-things-know-2025-12-16/
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