DETROIT— Ford engine It expects to record about $19.5 billion in special items related to a restructuring of its business priorities and a pullback in its investments in all-electric vehicles, the company announced Monday.
The Detroit automaker said most of those charges will occur during the fourth quarter. That will be followed by $5.5 billion in cash to be collected through 2027, with most of that portion paid out next year, Ford said.
The charges will affect the automaker's bottom line, but not its adjusted earnings. The automaker said Monday that it was raising its guidance for adjusted earnings before interest and taxes to around $7 billion in 2025. That's in line with a target from earlier this year, before the company lowered expectations to between $6 billion and $6.5 billion in adjusted EBIT in October.
The charges announced Monday, which include $8.5 billion in electric vehicle asset writedowns, are related to major changes to Ford's business plans.
The new plans include refocusing investments on hybrid vehicles, including plug-in models instead of pure electric vehicles; canceling a next generation of large all-electric trucks in favor of smaller, more affordable electric vehicles; and a rebalancing of its investments in core products such as trucks and SUVs.
The changes are the latest from Ford CEO Jim Farley and his “Ford+” restructuring plan, which has taken many different forms since he initially announced it as a plan for electric vehicle growth in 2021.
“We evaluated the market and made the decision,” Farley told CNBC's “Closing Bell Overtime” on Monday. “We're following customers to where the market is, not where people thought it was going to be, but where it is today.”
Ford, GM and Stellantis shares.
The electric vehicle segment has seen a drop in sales nationwide after the Trump administration in September ended early in September a $7,500 federal tax credit that was previously available to electric vehicle buyers in the US.
Farley said on CNBC that politics “wasn't the only reason we made this decision,” but acknowledged that it did play a role.
Ford also said Monday that its all-electric F-150 Lightning pickup truck will transition to an Extended Range EV, or EREV, which includes an electric powertrain and a gasoline generator, and announced plans to use battery plants in Kentucky and Michigan for a new stationary energy storage business.
“The last few months have been very clear to us,” Farley told CNBC's Phil LeBeau. “The very high-end electric vehicles (the $50,000, $70,000 and $80,000 ones) just weren't selling.”
Ford said the changes are expected to provide “a path to profitability” for its Model e electric vehicle business by 2029, with the goal of achieving annual improvements starting in 2026. The automaker also said it expects the changes to improve profits at its traditional Ford Blue unit and its Ford Pro fleet and commercial business “over time with early signs of profits in 2026.”
The automaker said it expects about 50% of its global volume by 2030 to be hybrids, EREVs and all-electric vehicles, up from 17% in 2025.
“These are big decisions that we believe will pay off for years to come for our customers, our employees, American jobs and manufacturing,” Andrew Frick, president of the Model ey Blue companies, said Monday during a media call. “Ford is following the customer. We're seeing the market as it is today, not as everyone predicted it would be five years ago.”
Ford said it will focus its electric vehicle development in North America on its new, flexible, low-cost Universal EV Platform, which is expected to support a “high-volume family of smaller, highly efficient and affordable electric vehicles.”
The first vehicle on the new platform will be a “fully connected midsize pickup truck” assembled at the company's Louisville assembly plant starting in 2027.
The company also expects its new storage business to be producing and shipping units by 2027 for things like “data centers, the power grid and much more,” Frick said.
“This is a compelling opportunity. It is a market with enormous potential and strong demand,” he said. “We will have 20 gigawatt hours of annual capacity for this market.”
Ford shares rose about 2% in after-hours trading on Monday.
Ford shares closed Monday at $13.65, down less than 1%. Ford shares at Monday's close were up nearly 40% this year.
