Ford to spend ₹1.77 lakh crore to cancel EV models; shift back to ICE, hybrid cars
In a shocking turn of events, Ford has announced a massive $19.5-billion (approximately ₹1.77 lakh crore) charge on its electric-vehicle investments. This move is a significant departure from the company’s earlier commitment to electric vehicles, and it has sent shockwaves through the automotive industry. The charge includes $8.5 billion tied to costs associated with killing future EV models, and about $6 billion tied to a now-cancelled battery operation joint venture with South Korea’s SK On.
The decision to cancel several electric vehicle models and shift focus back to internal combustion engine (ICE) and hybrid cars is a significant reversal of Ford’s earlier strategy. Just a few years ago, the company had announced plans to invest heavily in electric vehicles, with a goal of making them a significant part of its lineup. However, it seems that the company has now decided to take a step back and reassess its priorities.
One of the most significant consequences of this decision is the conversion of Ford’s flagship electric truck-manufacturing factory in Tennessee to produce models with ICE and hybrid engines. This factory was initially designed to produce electric vehicles, but it will now be repurposed to manufacture more traditional vehicles. This move is likely to have significant implications for the company’s production plans and will likely result in significant changes to its manufacturing operations.
The decision to cancel several electric vehicle models is also likely to have significant implications for the company’s product lineup. Ford had announced plans to launch several new electric vehicles in the coming years, but it seems that these plans have now been put on hold. Instead, the company will focus on producing more traditional vehicles, including ICE and hybrid models.
The reasons behind Ford’s decision to shift away from electric vehicles are not entirely clear, but it is likely that the company has been influenced by a combination of factors. One possible reason is the high cost of developing and producing electric vehicles. While electric vehicles have many advantages, including lower operating costs and reduced environmental impact, they are often more expensive to produce than traditional vehicles. This can make them less competitive in the marketplace, particularly in regions where government incentives for electric vehicles are limited.
Another possible reason for Ford’s decision is the limited demand for electric vehicles in certain markets. While electric vehicles have been popular in some regions, such as Europe and China, they have been slower to catch on in other parts of the world. This limited demand can make it difficult for companies like Ford to justify the high costs of developing and producing electric vehicles.
Despite the challenges facing the electric vehicle industry, many experts believe that Ford’s decision to shift away from electric vehicles is a mistake. Electric vehicles are widely seen as the future of the automotive industry, and companies that fail to invest in this technology risk being left behind. Additionally, governments around the world are increasingly implementing policies to encourage the adoption of electric vehicles, including tax incentives, subsidies, and regulations limiting the sale of traditional vehicles.
In conclusion, Ford’s decision to spend ₹1.77 lakh crore to cancel electric vehicle models and shift focus back to ICE and hybrid cars is a significant reversal of its earlier strategy. While the company’s reasons for making this decision are not entirely clear, it is likely that the high cost of developing and producing electric vehicles, combined with limited demand in certain markets, have played a role. However, many experts believe that this decision is a mistake, and that Ford risks being left behind in the transition to electric vehicles.
As the automotive industry continues to evolve, it will be interesting to see how Ford’s decision plays out. Will the company’s shift away from electric vehicles prove to be a wise move, or will it ultimately harm the company’s competitiveness in the marketplace? Only time will tell, but one thing is certain: the automotive industry will be watching Ford’s decision closely, and the consequences of this move will be felt for years to come.
News Source: https://www.reuters.com/business/autos-transportation/fords-195-billion-ev-writedown-five-things-know-2025-12-16/
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