Ford EV Pivot Wins Praise As 'Rational Response' To Cooling Demand

Core Viewpoint - Ford Motor Company is shifting its strategy away from electric vehicles (EVs) due to lower-than-expected demand, with plans to focus on hybrid offerings and a more flexible Universal EV Platform targeting 50% hybrid and extended range EV sales by 2030 [1][2] Group 1: Strategic Changes - Ford is restructuring its approach to EVs, expanding hybrid offerings and focusing on a Universal EV Platform [1][2] - The company anticipates a pre-tax asset writedown of $8.5 billion in Q4, with a total impact of $19.5 billion on EBIT and $5.5 billion on cash [2] - Ford management raised its 2025 adjusted EBIT guidance to approximately $7 billion, up from $6.25 billion [3] Group 2: Financial Performance - The Model E segment reported a loss of $0.14 billion in Q3 and $1.3 billion in Q2, with estimated EV losses of $4.9 billion for 2025 [3] - The strategic adjustment is seen as a rational response to the slowing EV market and the removal of the $7,500 EV tax credit [4] - Achieving breakeven in the Model E segment by fiscal 2029 could provide a $4.9 billion boost to EBIT, helping to offset $5.5 billion in net debt by fiscal 2026 [4] Group 3: Market Reaction - Ford stock closed at $13.67, reaching a new 52-week high of $13.99 during the trading session, with shares up 41.7% year-to-date in 2025 [5] - The impairment related to Ford's strategy is noted to be larger than GM's by a factor of 12, indicating potential challenges in retooling manufacturing plants [5] Group 4: Operational Adjustments - Ford is exiting the BlueOval SK joint venture, assuming ownership of two EV battery plants in Kentucky, cancelling three planned EV models, and ending production of the F-150 Lightning [6]