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I had expected Farley to resist writing off Ford's investment in EVs, until he retires, so the writeoff becomes someone else's problem. Nope. Just sent nearly $20B to money heaven. Interestingly, F is trading up a mite after hours, like everyone expected this, and is relived the shoe finally dropped.
Ford retreats from EVs, takes $19.5 billion charge as Trump policies take hold
Dec 15 (Reuters) - Ford Motor said on Monday it will take a $19.5 billion writedown and is killing several electric-vehicle models, in the most dramatic example yet of the auto industry's retreat from battery-powered models in response to the Trump administration's policies and weakening EV demand.
The Dearborn, Michigan-based company said it will stop making the F-150 Lightning in its electric vehicle form, but will pivot to producing an extended-range electric model, a version of a hybrid vehicle called an EREV, which uses a gas-powered generator to recharge the battery. The company is also scrapping a next-generation electric truck, codenamed the T3, as well as planned electric commercial vans.
Ford will spread out the writedown, taken primarily in the fourth quarter and continuing through next year and into 2027, the company said. About $8.5 billion is related to cancelling planned EV models. Around $6 billion is tied to the dissolution of a battery joint venture with South Korea’s SK On, and $5 billion on what Ford called “program-related expenses.”https://finance.yahoo.com/news/ford-retreats-evs-t...This is the part of the article that makes me laff.
For its future EV lineup, the company is shifting focus to more affordable EV models, conceived by a so-called skunkworks team in California. The first model from that team is slated to be priced at about $30,000 and go on sale in 2027. This midsize EV truck is being built at Ford’s Louisville plant.Farley has indicated that "affordability" is not his objective. His objective is to continuously push ATP and GP higher. I have offered before that that "affordable" EV to be built in Louisville is vaporware, a sop to the pols and workers in that plant, so they think they have a future. Farley openly said, two years ago, he wants to exit the two row SUV segment, because "competition" forces him to charge less than he wants to, dragging down his ATP and GP metrics.
Here's something to chew on, that greenfield "Blue Oval City" plant that, now, is supposed to start building gas powered trucks, is supposed to have a capacity of 500,000 trucks/year. The Rouge truck plant has a capacity of 300,000/year, and Kentucky Truck has a capacity of about 500,000/year. Does Farley actually expect their truck sales to increase by 60% by 2029? Of will they close another truck plant, to keep "Blue Oval City" running at an economic rate, in addition to Louisville Assembly standing idle?
Steve
