Ford’s $19.5 Billion Flop Latest Bust for EV Industry

In the latest blow for the struggling electric vehicle (EV) market, Ford Motor Company announced in mid-December that it expects to record $19.5 billion in impairment charges or “write-downs” related to its electric-vehicle business. Ford has also canceled the all-electric F-150 Lightning and scaled down other EV plans while shifting resources toward hybrids and extended-range trucks.

A write-down means Ford must acknowledge that assets tied to its EV sector, including production plants, equipment, and other spending, are now worth far less than it initially said. The company is effectively admitting the investment won’t earn back what was spent on it.

As The Wall Street Journal reported, instead of expanding EV production, Ford will convert a Kentucky battery plant to produce stationary storage systems for utilities and data centers. Ford has lost approximately $13 billion on EVs since 2023. Ford is also scrapping another planned electric truck and an electric commercial van, shifting investment toward hybrids and extended-range models that rely on onboard gasoline engines.

These setbacks are hardly unique to Ford and further indicate that EV demand has lagged far behind aggressive projections made in recent years.

General Motors, the largest U.S. automaker by sales volume, has announced that it expects to take a $1.6 billion hit related to changes in its EV rollout, warning investors that additional write-downs are possible as production slows. GM CEO Mary Barra notably committed to a “zero emissions” future in 2017, pledging, “No more gas. No more diesel. No more carbon emissions.” GM’s most profitable vehicles by far have consistently been full-size gas trucks and SUVs like the GMC Sierra and GMC Yukon.

Tesla, still the country’s dominant EV manufacturer, is also losing momentum, with Cox Automotive estimating an 8.9 percent sales drop from 2024. EV inventory ballooned from about 40 days of supply at the end of the third quarter to roughly 149 days in November — a near fourfold surge and more than 40 percent higher year-over-year.

Cox reports that total U.S. EV sales fell 6.3 percent in the second quarter of 2025, with analysts citing charging access, reliability concerns, and higher upfront prices relative to gas-powered models as key deterrents. Jessica Caldwell, head of insights at Edmunds, said many car shoppers “don’t want the hassle” of charging or learning new systems.

While the EV industry was buoyed by hundreds of billions of dollars in taxpayer-funded subsidies during the Biden administration, that influx of cash could not erase lackluster enthusiasm among consumers. A federal EV tax credit worth up to $7,500 per vehicle expired on September 30 under President Donald Trump’s “One Big Beautiful Bill,” removing a key incentive that artificially boosted EV demand.

President Trump also reset Corporate Average Fuel Economy (CAFE) standards, the federal rules that require automakers to meet a government-mandated average fuel-efficiency target across all the vehicles they sell. Under the Biden administration, those targets effectively penalized companies for selling gas-powered cars – especially trucks and SUVs – by forcing them to offset lower-mileage vehicles with costly fuel-saving technology or EVs.

Those compliance costs are ultimately passed on to consumers, driving up the price of gas-powered cars and shrinking affordable options. The Trump administration argues that easing the rules will lower prices by allowing automakers to build vehicles based on consumer demand rather than regulatory math. Thanks to the CAFE reset, manufacturers may comply using gasoline and diesel engines rather than forced electrification.

The White House says the change will prevent roughly $1,000 from being added to the sticker price of a new car and save American families $109 billion over five years. It also ends EV mandates and sets the CAFE violation penalty to $0, shielding automakers from steep fines previously tied to EV shortfalls.

Even before the EV subsidies ended, many buyers were hitting an affordability wall. EVs still cost about $7,000 more than the average new vehicle, according to Kelley Blue Book. The average price for all new vehicles has climbed past $50,000, and monthly payments are near record highs.

Surveys by Edmunds found that shoppers hesitant about EVs most often cited charging station availability, long charging times, reliability concerns, and the perceived hassle of learning a new system. NBC also reported that EV sales dipped before the tax credit expired, showing the hesitation was about more than subsidies.

The Institute for Energy Research (IER) notes that many Americans believe that automakers raised sticker prices on gas and diesel vehicles to offset EV losses, leaving working- and middle-class buyers with fewer affordable options.

Lagging demand isn’t confined to the United States, either. Europe is also cooling its electrification targets. The European Union recently softened its planned 2035 ban on new gas-powered cars, instead setting a 90 percent emissions-reduction requirement that still allows a limited share of hybrids and efficient combustion-engine vehicles, the IER reports.

Ford’s losses highlight the limits of policy-driven electrification in a market shaped by affordability and consumer trust. As subsidies fade and mandates ease, automakers are confronting the gap between regulatory ambition and real-world demand.

Sarah Katherine Sisk is a proud Hillsdale College alumna and a master’s student in economics at George Mason University. You can follow her on X @SKSisk76.