On December 16, 2025, Ford Motor Company announced a $19.5 billion asset write-down on Monday, December 15, mainly related to its electric vehicle business. This major strategic contraction comes as the company faces declining demand for electric vehicles and changes in policy headwinds.
Since 2023, Ford has incurred $13 billion in losses in its electric vehicle business, as reported by The Wall Street Journal on Monday. The purpose of this asset write-down is to withdraw from the loss-making assets and reallocate the funds originally designated for electric vehicles to more profitable models. Ford will strengthen its lineup of gasoline-powered vehicles in the future, while also increasing hybrid vehicles and expanding the proportion of plug-in hybrid electric vehicles equipped with gasoline engines.
Asset write-down, also known as writedown or impairment, is an accounting term that formally records and confirms the impairment or devaluation of assets in financial statements.
Changes in government regulatory policies and subdued demand from American consumers have forced this American automaker to abandon its ambitious plans to quickly shift towards electric vehicles.
This year, the Trump administration rolled back some overly stringent clean air and fuel economy requirements implemented during the Biden era and ended the $7,500 tax credit for electric vehicles, resulting in a significant drop in electric vehicle sales in the United States in November.
Meanwhile, many consumers have decided to temporarily steer clear of pure electric vehicles due to relatively high prices, concerns about battery range, and poor accessibility to charging stations.
Ford CEO Jim Farley commented on the move, saying, “Instead of pouring billions into large electric vehicles that will never be profitable, we are changing course. That’s what we are doing.”
Ford still plans to introduce a $30,000 electric pickup truck by 2027, which will be the first of a new wave of low-cost electric vehicles.
The company will cease production of the electric version of the F-150 pickup truck, Lightning, and switch to a plug-in hybrid version. By 2030, approximately half of its global sales will consist of hybrid and plug-in hybrid electric vehicles, exceeding the current 17% proportion.
Recently, there has been an acceleration in the global shift towards hybrid vehicles. These models are seen as more affordable and practical by consumers who are unwilling to fully rely on pure electric vehicles.
To boost revenue, Ford’s electric vehicle battery plant in Kentucky will transition to operate in battery storage business, serving utilities, wind and solar developers, and AI data centers. The company plans to hire thousands of new employees in the United States, but around 1,600 workers at the battery plant will be laid off during the transition period.