Ford Pays the Price for Electric Vehicle Investments

National Review Online

Wednesday, December 17, 2025

 

Ford Motor Company has been on the front line of America’s supposed electric vehicle revolution for the past five years. Now, it has discovered that the EV market it was chasing never actually existed.

 

On Monday, Ford announced that it was writing down $19.5 billion in charges, with most of the losses stemming from its flailing EV business. The company now plans to change strategy, redirecting capital from the EV money pit toward models that are more likely to turn a profit, including, notably, hybrid gas-and-electric vehicles. Expect other legacy automakers that drank the EV Kool-Aid (with varying degrees of enthusiasm) to make similar announcements in the coming months.

 

Ford CEO Jim Farley summed up his reasoning: “Instead of plowing billions into the future knowing these large EVs will never make money, we are pivoting.” The company’s electric version of its F-150 pickup truck, the Lightning, will be scrapped. An EV battery factory in Kentucky will be transformed into a battery storage business for industrial clients.

 

Green energy enthusiasts will surely blame Ford’s staggering losses on President Trump, who signed legislation repealing EV tax credits and rescinded fuel-efficiency mandates this year. The truth, however, is that a mass-market EV industry was destined to struggle long before Trump won his second term. It was conjured by central planners in Washington, not consumer demand, and needed to be propped up by cash and coercion to survive. No more than a sliver of the U.S. car-buying market ever desired to purchase an EV, and no traditional automaker could conquer the market niche that Tesla already carved out.

 

Policymakers began their campaign against gas-powered cars over a decade ago. In the late 2000s, Congress attempted to midwife the EV industry by creating a $7,500 tax credit per vehicle sold, which would phase out after a manufacturer reached 200,000 electric cars. President Obama pledged additional federal support in 2011 and declared a goal of 1 million EVs on U.S. roads by 2015. The actual number? Just under 400,000.

 

The Obama administration’s failure to foist EVs onto Americans didn’t deter President Biden. He spearheaded legislation to drastically expand the federal EV tax credit in 2022, extending it to all personal sales, as well as used and commercial vehicles.

 

Yet consumers still refused to buy EVs in the numbers bureaucrats envisioned. The price of a new EV, even when partially offset by taxpayer funds, was still far higher than that of gas-powered and hybrid vehicles. Tax credits mostly served to subsidize affluent car buyers who would have purchased an EV regardless and rarely bought one as their sole car, putting tens of billions of dollars to waste.

 

If drivers didn’t want to buy EVs voluntarily, Biden would have to force them. Regulatory changes introduced in 2023 and 2024 meant that automakers would need to manufacture a certain number of EVs as a percentage of their total fleets within a decade, regardless of real demand. By 2032, two-thirds of new cars would have to be electric to comply.

 

This was a blessing (only very lightly disguised) for major automakers, which had poured billions of dollars into EV production. Sure, they would be prohibited from making the cars that customers wanted to buy, but their competitors would be as well. If they wanted new cars, consumers would have no choice but to purchase EVs, thereby paying back the foolish investments in EV production that the government cajoled companies to make.

 

That is, until the 2024 election, when voters gave Republicans a governing trifecta. Congressional Republicans repealed the EV tax credit as part of this year’s reconciliation package, and President Trump has rolled back Biden’s regulatory dictates. Suddenly, automakers like Ford are realizing that nobody is going to make people buy their latest electric models or even bribe them to do it. Their investments in EVs made sense only when Washington was pressuring the market to conform to its fantasies, and now that pressure is gone. Automakers are finally free to meet car buyers’ true demands — but not before government meddling cost them a fortune.

 

Consumers fought the government’s schemes for them to all own EVs every step of the way for one reason: EVs are not attractive to the vast majority of drivers. They’re expensive, limited in range, and often impractical to charge, and they have few advantages over gas-powered cars aside from virtue-signaling. These are hard realities that no ad campaign or subsidy could overcome.

 

If EV technology improves in the future, let it be adopted through the free decisions of automakers and car buyers — not the domineering hand of progressive policymakers. Ford’s $19.5 billion retreat shows that, so far as the market is concerned, we aren’t anywhere close to that yet.