Ford announced on Monday that it is shifting away from electric vehicle production, which will lead to a $19.5 billion impairment in the following months.
The news came four months after the company announced a $5 billion investment in a universal EV platform, which is expected to yield its first product — a mid-size pickup priced around $30,000 — in two years.
This strategy included production of LFP batteries in a dedicated facility at Ford‘s Louisville Assembly Plant, through its joint venture with Korean manufacturer SK On — BlueOval SK.
In August, the Detroit automaker said it aimed at “creating or securing nearly 4,000 jobs” across Louisville and Michigan’s BlueOval Battery Park.
However, 1,600 employees will now be laid off from the Kentucky plant as Ford shifts production to energy storage systems.
Ford will now manufacture batteries for data centers and other utilities, with plans for the Kentucky and Michigan production to roll out by late 2027.
BlueOval SK’s CEO Michael Adams told employees in a video statement that the shift would result in “the end of all BlueOval SK Positions in Kentucky.”
While the chief executive did not specify when the layoffs will occur, he assured workers they would continue to receive pay for the next 60 days and retain access to all benefits.
At the same time, Ford plans to hire 2,100 employees for the new production phase.
A company spokesperson said on Monday that all those who were laid off will have “the opportunity to apply” for these jobs.
BlueOval SK
Ford announced in early August that the Louisville Assembly Plant will be the launch site for a new generation of electric vehicles built on the company’s Universal EV Platform.
By then, the automaker said it would invest an additional $2 billion in the Kentucky plant to support production of the upcoming mid-size electric truck. The facility was set to be expanded by 52,000 square feet.
The project was also supported by an incentive offer from the Kentucky Economic Development Finance Authority.
By then, Kentucky Governor Andy Beshear said the investment would “secure 2,200 jobs for Kentuckians.”
“Ford and Kentucky have been a tremendous team for more than 100 years, and that partnership has never been stronger than it is today,” he noted.
In August, SK On announced that commercial production had begun at the BlueOval SK battery plant in Hardin County, Kentucky.
These batteries were set to power the fully electric Ford F-150 Lightning.
However, the two companies announced last week the end of their partnership.
According to Ford‘s CEO Jim Farley, the company planned for too much EV capacity and needed to pull back in response to policy changes and slow demand.
F-150 Lightning Production Halt
A few days later, the automaker announced that production of its F-150 Lightning was also put to an end, as part of its strategy shift.
Manufacturing operations had been suspended for two months already, disrupted by a fire at one of the aluminium suppliers.
While noting that the company will now focus on the hybrid iteration of the pick-up, CEO Jim Farley said in a CNBC interview that “more importantly, the very high-end EVs, the $50,000, $70,000, $80,000 vehicles, they just weren’t selling.”
The F-150 Lightning is priced between $57,375 and $87,590, depending on the configuration.
“Instead of plowing billions into the future knowing these large EVs will never make money, we are pivoting,” he told the Wall Street Jornal.
Ford‘s EV sales jumped ahead of the deadline for the federal tax credit (on September 30), and saw steep declines in the past two months as consumer interest wavered.
The company’s EV division ‘Model e’ has incurred losses of over $5 billion in 2024 and is expected to lose above $5 billion more in 2025.
Once the effects of the nearly $20 billion write-down fade over the next two years, Ford expects its EV unit to reach profitability by 2029.
Kentucky State Reaction
Reacting to the announcement, a spokesperson for the Kentucky Governor said that the state will remain the “EV battery capital of the US […] despite the President’s shortsighted attacks on the industry.”
Andy Beshear is in “direct contact” with Ford, but said that the current focus of the state is on “helping the affected BlueOval employees find new jobs.”
Later on Monday, he noted that the office is reviewing the terms of the incentive agreement signed earlier this year with the automaker.
The state of Kentucky had agreed to give BlueOval an interest-free loan of $250 million if the company employed 2,500 people by 2026 and 5,000 by 2030.
Republican Kentucky House Members Samara Heavrin and Steve Bratcher also commented on the shift, saying they are “optimistic about Ford Motor Company‘s decision to take over the Glendale facility and transition the project toward energy storage.
The representatives said that “initial plans for the project have faced significant challenges from the outset.”
However, they noted that “optimism must be matched with both caution and accountability, and we will be watching closely to ensure commitments are met and honored.”
