Ford Motor Company has announced a massive $19.5 billion write-down on its electric vehicle investments, signaling a retreat from ambitious EV plans amid slowing demand. The automaker will lay off workers at a Kentucky battery plant but plans to repurpose it for producing grid storage batteries. This shift aims to tap into the booming energy storage market, targeting 20 gigawatt-hours of annual production by 2027.
Ford's decision marks a significant pivot after investing heavily in electric vehicles. On Monday, the company revealed it would impair nearly $20 billion in book value related to its EV operations, including the dissolution of a joint venture with South Korean battery maker SK On. This write-down reduces Ford's overall corporate value from over $47 billion as of September 30 to reflect losses on planned EV models and factory retooling.
The move impacts operations in the southeastern U.S. Battery Belt. At its Glendale, Kentucky, facility, Ford will lay off about 1,600 employees as it shifts away from EV battery production. Similarly, a factory in Tennessee will hire around 1,000 fewer workers than originally planned, now focusing on gas-powered trucks instead of electric ones. Ford will retain the Kentucky plant, while SK On takes over the one near Memphis.
Despite the EV setbacks, Ford is investing $2 billion over the next two years to convert the Kentucky site into a hub for grid storage. The plant will produce lithium iron phosphate cells packaged into 20-foot containers, each holding at least 5 megawatt-hours—comparable to Tesla's Megapack. By the end of 2027, Ford aims to ship at least 20 gigawatt-hours annually. Additionally, its Marshall, Michigan, factory will manufacture cells for home battery units.
"This strategic initiative will leverage currently underutilized electric vehicle battery capacity to create a new, diversified, and profitable revenue stream for Ford," the company stated. Analyst Pavel Molchanov of Raymond James noted, "While EV demand is languishing, U.S. energy storage deployments are skyrocketing."
The backdrop includes sluggish U.S. EV sales, which make up just 10% of new vehicle purchases, compared to 25% globally. The end of the federal EV tax credit in September, due to a Republican budget law, has further dampened demand. Gasoline prices have fallen below $3 per gallon for the first time in four years, while residential electricity costs rose 13% in the year's first three quarters. Meanwhile, U.S. grid battery installations are set to hit a record this year, driven partly by demand from AI data centers, where Ford plans to sell its products.
This transition comes as federal policies, including the 'One Big Beautiful Bill Act' signed by President Trump, preserve tax incentives for energy storage but impose restrictions on Chinese-sourced components starting in 2026. Ford's entry into this market positions it to benefit from growing domestic demand, though it faces competition from established players like Tesla.
