Ford is making big changes. The company plans to record around $19.5 billion in expenses as it shifts its focus from all-electric vehicles (EVs) to hybrids and more affordable models.
Most of these costs will come in the fourth quarter. Additionally, Ford will set aside $5.5 billion in cash through 2027, with the majority paid next year. While these costs will affect Ford’s overall earnings, they won’t alter its adjusted earnings outlook. Ford is raising its forecast for adjusted earnings before interest and taxes to about $7 billion for 2025, up from an earlier expectation of $6 to $6.5 billion.
These changes include an $8.5 billion write-down on EV assets, signaling a major pivot in strategy. Ford’s new focus will shift to hybrids and smaller, affordable EVs. CEO Jim Farley emphasized the need to adapt: “We evaluated the market, and we made the call,” he stated. He noted that they are responding to current customer preferences rather than past predictions.
This shift comes in the context of a broader decline in the EV market, particularly after the end of a federal tax credit for EV buyers earlier this year. Farley acknowledged this policy change influenced their decisions.
Ford is also revamping its all-electric F-150 Lightning pickup to include both an electric drivetrain and a gas generator, known as an Extended-Range Electric Vehicle (EREV). Additionally, the company plans to venture into energy storage using its battery plants in Kentucky and Michigan, targeting markets such as data centers and power grids.
Industry experts see this shift as a smart move to enhance profitability. A recent survey showed that only 17% of consumers are currently interested in traditional EVs, with many leaning towards hybrids instead. Ford aims for 50% of its global production to be hybrids and EVs by 2030, a significant jump from today.
The switch to hybrids and efficient EVs reflects not only changing consumer behaviors but also market realities. As Ford develops its new Universal EV Platform, the first vehicle from this initiative is set for production in 2027.
Despite these changes, Ford’s stock is holding steady, indicating that investors are optimistic about its new direction. Shares recently closed at $13.65, reflecting a nearly 40% increase this year.
In summary, Ford is pivoting its strategy in response to current market demands. By focusing on hybrids and more accessible EVs, the company aims to build a sustainable path forward while accommodating evolving consumer preferences.
For more insights on the automotive industry’s transition and trends, you can explore authoritative sources like Reuters.
Source link
Jim Farley,Environment,Jim Farley,Ford Motor Co,Business,Transportation,Autos,Breaking News: Business,business news
