In a significant strategic update, American automotive giant Ford Motor Company has announced a major shift in its electric vehicle (EV) plans, pivoting towards a more flexible approach that heavily incorporates hybrids and extended-range electric vehicles (EREVs). The company outlined a series of crucial decisions, including a substantial financial charge and changes to its future product lineup.
Strategic Pivot: New F-150 Lightning Architecture and Product Changes
The cornerstone of Ford's new direction is a fundamental change for its flagship electric pickup. The next-generation F-150 Lightning will transition to an Extended-Range Electric Vehicle (EREV) architecture. This model will be assembled at the Rouge Electric Vehicle Center in Dearborn, Michigan. Concurrently, production of the current generation F-150 Lightning has officially concluded.
In a move reflecting changing market dynamics, Ford stated it will no longer produce select larger EVs where the business case has eroded. This erosion is attributed to lower-than-expected consumer demand, high costs, and evolving regulatory changes. As part of this reassessment, the company has scrapped plans for a previously announced new electric commercial van for the European market.
For North America, Ford plans to replace a planned electric commercial van with a new, more affordable commercial van offering that will include both gasoline and hybrid powertrain options. The company reaffirmed its commitment to its "Built Ford Tough" legacy, announcing that new pickups under this banner will be assembled at the BlueOval City complex in Tennessee. A new gasoline and hybrid van will be produced at the Ohio Assembly Plant.
Financial Outlook and New Business Ventures
The strategic shift comes with significant financial implications. Ford expects to record approximately $19.5 billion in special item charges, with the majority being booked in the fourth quarter of this year. Despite this, the company reaffirmed its 2025 guidance for adjusted free cash flow, which is in the range of $2 billion to $3 billion, and noted it is trending towards the higher end of that range.
Looking ahead, Ford provided an outlook for 2025, forecasting an adjusted EBIT (Earnings Before Interest and Taxes) of about $7 billion. The company's electric vehicle division, Ford Model E, is now projected to reach profitability by 2029, with improvements beginning to materialize from 2026 onwards.
In a notable diversification move, Ford is launching a new Battery Energy Storage System (BESS) business. The plan involves repurposing existing battery manufacturing capacity in Glendale, Kentucky. The automaker intends to invest roughly $2 billion over the next two years to scale this venture, with plans to begin shipping BESS units in 2027, targeting an annual capacity of 20 Gigawatt-hours (GWh).
Long-Term Vision and Employment
Ford's long-term electrification target has been refined. The company now aims for about 50% of its global sales volume to consist of hybrids, EREVs, and full electric vehicles by 2030. This marks a substantial increase from the projected 17% in 2025, indicating a accelerated but more balanced path to electrification that relies heavily on hybrid technology.
On the employment front, Ford and its units plan to hire thousands of new employees in the United States over the next few years, signaling continued investment in its domestic manufacturing and technological capabilities despite the strategic realignment.
This comprehensive update from Ford highlights the auto industry's ongoing adjustment to the realities of EV adoption, balancing ambitious electrification goals with market demand, cost pressures, and the need for a diversified portfolio that includes hybrids and new energy solutions.
