Ford Motor Company’s decision to abandon its electric vehicle battery production marks a watershed moment for the automotive sector. After losing over $13 billion on its EV business since 2023, the company announced a $19.5 billion charge in mid-December 2025—the largest single EV-related loss in Detroit’s history. The move signals a fundamental reassessment of electrification timelines across the industry, with competitors General Motors and Stellantis following suit in scaling back their own EV ambitions.
The Collapse of a Flagship Investment
Ford’s BlueOval SK venture represented one of the most ambitious battery manufacturing projects in American history. The $5.8 billion partnership with South Korean manufacturer SK On promised 11,000 new jobs across Kentucky and Tennessee facilities and was hailed as the largest industrial investment in Kentucky’s history. Production began at the Kentucky plant in August 2025, but within weeks, internal reviews revealed a harsh reality: large electric vehicles like the F-150 Lightning could not achieve profitability targets.
Supply-chain costs and consumer demand patterns exposed fundamental flaws in Ford’s initial EV strategy. By December, executives acknowledged the venture was unsustainable. On December 9, 2025, Ford formally dissolved its partnership with SK On, taking full control of the Kentucky plants while SK On retained the Tennessee facility. Days later, on December 15, the company announced it would lay off all 1,600 employees at the BlueOval SK facility.
The Human Cost
Workers at the Kentucky plant learned of their termination through a company video and media reports. While Ford offered two months of continued pay and promised potential reemployment in 2027, the shift toward grid-storage manufacturing left many feeling betrayed. The new roles would require different skills and training, creating uncertainty for displaced workers in Glendale, Kentucky, and surrounding communities.
Local lawmakers decried the broken promises. The state of Kentucky had provided Ford with a $250 million forgivable loan contingent on job creation, and officials are now renegotiating the terms of the deal as Ford pivots away from EV production.
A Broader Industry Reckoning
Ford’s retreat reflects deeper market pressures facing legacy automakers. Tesla’s market dominance and cost advantages from Chinese competitors like BYD and CATL have squeezed traditional manufacturers. The expiration of federal EV tax credits in September 2025 triggered a sharp drop in demand, exposing what analysts call a “credibility gap” between EV promises and market realities.
General Motors and Stellantis have similarly recalibrated their electrification strategies, acknowledging comparable profitability challenges. The industry is shifting focus toward hybrid solutions and slower electrification timelines, signaling potential advantages for Chinese EV manufacturers while Western automakers consolidate their positions.
Ford’s New Direction
Rather than abandoning battery technology entirely, Ford plans to convert the Kentucky plant into a battery-storage manufacturing hub for utilities, data centers, and renewable energy projects. Production of 5-megawatt-hour storage systems is scheduled to begin by late 2027, with the facility expected to create 2,100 jobs. However, analysts question Ford’s ability to transition laid-off workers into these roles and express doubts about demand for large-scale storage solutions.
CEO Jim Farley explained the pivot bluntly: “Instead of plowing billions into the future knowing these large EVs will never make money, we are pivoting.” The decision reflects pressure from Ford’s board and investors to stem mounting losses rather than pursue growth through traditional EV production.
What Lies Ahead
Ford’s future depends on several uncertain factors: growth in the grid-storage market, its capacity to retrain workers, and the broader industry shift toward hybrid-electric vehicles. The company’s pivot represents a significant bet against full EV adoption, at least in the near term. As the automotive sector recalibrates its electrification strategy, Ford’s transformation will likely influence how legacy automakers approach battery technology and vehicle electrification for years to come.
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Sources
CNBC — “Ford to record $19.5 billion in special charges, pull back on electric vehicle initiatives” (December 15, 2025)
WDRB News Louisville — “All 1600 Kentucky battery plant employees laid off as Ford pivots away from EV” (December 18, 2025)
USA Today — “Ford’s $19.5 billion pivot brings hybrids back, keeps F-150 Lightning” (December 16, 2025)
Wall Street Journal — Ford EV and BlueOval SK reporting (December 2025)
Hardin County Government/WNKY — “Ford Motor Company announces layoff of 1,600 battery plant employees” (December 15, 2025)