Ford to spend ₹1.77 lakh crore to cancel EV models; shift back to ICE, hybrid cars
In a shocking move, Ford has announced that it will be taking a massive $19.5-billion (approximately ₹1.77 lakh crore) charge on its electric-vehicle investments. This decision comes as a significant setback to the company’s electric vehicle (EV) ambitions, with a substantial portion of the charge tied to the costs associated with killing off future EV models. The news has sent shockwaves throughout the automotive industry, leaving many to wonder about the future of electric vehicles and the strategies of major automakers.
According to the announcement, about $8.5 billion of the charge is directly related to the cancellation of future EV models. This move is a significant reversal of Ford’s previous commitment to investing heavily in electric vehicles. The company had earlier stated its intention to become a leader in the EV market, with plans to launch a range of new electric models in the coming years. However, it appears that those plans have now been put on hold, and the company is shifting its focus back to traditional internal combustion engine (ICE) and hybrid vehicles.
Another significant portion of the charge, about $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 by providing access to advanced battery technology. However, with the cancellation of the JV, Ford will now need to explore alternative arrangements for its battery needs.
Perhaps the most significant indication of Ford’s shift away from EVs is the conversion of its flagship electric truck-manufacturing factory in Tennessee. The factory, which was previously dedicated to the production of electric vehicles, will now be retooled to produce models with ICE and hybrid engines. This move is a clear signal that Ford is no longer committed to its previous EV strategy and is instead focusing on more traditional powertrains.
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 been facing significant challenges in its efforts to develop and produce competitive electric vehicles. The EV market is highly competitive, with established players like Tesla and newcomer Rivian offering a range of attractive and innovative models. Additionally, the development of electric vehicles requires significant investment in new technologies and manufacturing processes, which can be a major barrier to entry for traditional automakers.
Furthermore, the cancellation of the battery operation JV with SK On may have also played a role in Ford’s decision. The JV was intended to provide Ford with access to advanced battery technology, which is critical for the development of competitive electric vehicles. Without this partnership, Ford may have felt that it lacked the necessary expertise and resources to develop and produce high-quality EVs.
The implications of Ford’s decision are significant, not just for the company itself but also for the broader automotive industry. The shift away from EVs and back to ICE and hybrid vehicles may be seen as a setback for the industry’s efforts to reduce emissions and transition to more sustainable forms of transportation. However, it may also be an indication that the industry is not yet ready to make a full transition to electric vehicles, and that more traditional powertrains will continue to play a major role in the market for the foreseeable future.
In conclusion, Ford’s decision to cancel its EV models and shift back to ICE and hybrid vehicles is a significant development in the automotive industry. The company’s $19.5-billion charge on electric-vehicle investments is a clear indication that it is no longer committed to its previous EV strategy, and that it is instead focusing on more traditional powertrains. While the reasons behind this decision are not entirely clear, it is likely that the company has been facing significant challenges in its efforts to develop and produce competitive electric vehicles. As the industry continues to evolve and transition to more sustainable forms of transportation, it will be interesting to see how Ford’s decision plays out and what implications it may have for the broader market.
News Source: https://www.reuters.com/business/autos-transportation/fords-195-billion-ev-writedown-five-things-know-2025-12-16/
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