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 previous commitment to electric vehicles and signals a major shift in its strategy. The announcement has sent shockwaves throughout the automotive industry, leaving many to wonder what prompted this drastic change in direction.
According to the company, $8.5 billion of the charge is tied to costs associated with killing future electric vehicle (EV) models. This is a staggering amount, considering the significant investments Ford had made in EV technology and production. The decision to cancel these models is likely to have a significant impact on the company’s product lineup and its ability to compete in the rapidly evolving EV market.
Another significant portion of the charge, approximately $6 billion, is tied to a now-cancelled battery operation joint venture (JV) with South Korea’s SK On. This JV was intended to support Ford’s EV ambitions, but its cancellation suggests that the company is no longer committed to pursuing battery production in-house. This move may have significant implications for Ford’s supply chain and its ability to secure batteries for its remaining EV models.
Perhaps the most surprising aspect of Ford’s announcement is its decision to convert its flagship electric truck-manufacturing factory in Tennessee to produce models with internal combustion engines (ICE) and hybrid engines. This factory was specifically designed and built to produce electric vehicles, and its conversion will likely require significant investments in new equipment and production lines. The decision to abandon electric vehicle production at this facility is a clear indication that Ford is shifting its focus away from EVs and back towards traditional ICE and hybrid vehicles.
The reasons behind Ford’s decision to cancel its EV models and shift back to ICE and hybrid vehicles are not entirely clear. However, it is likely that the company has faced significant challenges in its EV development and production efforts. The high cost of EV batteries, combined with intense competition in the EV market, may have made it difficult for Ford to achieve profitability with its EV models. Additionally, the company may have determined that its EV models were not meeting customer demand or expectations, leading to a re-evaluation of its product strategy.
The implications of Ford’s decision are far-reaching and will likely have significant effects on the automotive industry as a whole. The company’s shift away from EVs may embolden other manufacturers to re-evaluate their own EV strategies, potentially leading to a slowdown in the adoption of electric vehicles. Additionally, the cancellation of Ford’s EV models may leave a gap in the market, creating opportunities for other manufacturers to fill the void.
In conclusion, Ford’s decision to spend ₹1.77 lakh crore to cancel its EV models and shift back to ICE and hybrid vehicles is a significant development that will have far-reaching implications for the automotive industry. While the reasons behind this decision are not entirely clear, it is likely that the company faced significant challenges in its EV development and production efforts. As the industry continues to evolve, it will be interesting to see how other manufacturers respond to Ford’s decision and how the market for electric vehicles continues to develop.
News Source: https://www.reuters.com/business/autos-transportation/fords-195-billion-ev-writedown-five-things-know-2025-12-16/
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