Strategic Redeployment
Ford pivots factories from pure EVs to hybrid future
The American manufacturer is repurposing its Tennessee and Ohio plants to produce trucks and vans with internal combustion and hybrid powertrains whilst launching a battery storage venture, marking a decisive retreat from EV-only production
Ford's has revealed a wide-reaching and highly calculated pivot, unveiling a strategy that amounts to more than mere product rescheduling. This latest announcement represents a fundamental recalibration of the OEMs manufacturing philosophy, one which exchanges the singularity of electrification for the pragmatism of powertrain pluralism. As pure EV strategies wane and hybrid flexibility takes hold, the carmaker is shifting approximately $19.5 billion in special charges onto its books, the majority landing in the fourth quarter of 2025, whilst simultaneously raising its adjusted EBIT guidance to roughly $7 billion.
The move is unambiguous. By 2030, Ford expects approximately half its global volume to comprise hybrids, extended-range EVs and fully electric vehicles, up from a mere 17% today. Yet the path to this target abandons the pure-play electric infrastructure the company had been constructing up to this point. Instead, Ford is converting what was to be its electric manufacturing crown jewel into something altogether different.
Tennessee and Ohio reset for commercial dominance
The BlueOval City campus in Tennessee, originally conceived as an electric vehicle manufacturing hub, will now house the renamed Tennessee Truck Plant. Starting in 2029, this facility will produce affordable Internal Combustion Engine (ICE) trucks, replacing the previously planned next-generation electric truck. The strategic logic is transparent enough. Ford is repurposing existing capacity to serve established market demand rather than betting on customer adoption curves that have failed to materialise as projected.
The Ohio Assembly Plant follows a parallel trajectory, transforming into what Ford describes as a central hub for Ford Pro. Beginning in 2029, the facility will assemble a new gas and hybrid commercial van alongside Super Duty chassis cabs. The OEM has cancelled plans for an electric commercial van in North America and abandoned a separate electric van programme for Europe, though it maintains existing electrified van offerings in European markets.
This is a customer-driven shift to create a stronger, more resilient and more profitable Ford. The operating reality has changed, and we are redeploying capital into higher-return growth opportunities: Ford Pro, our market-leading trucks and vans, hybrids and high-margin opportunities like our new battery energy storage business
"This is a customer-driven shift to create a stronger, more resilient and more profitable Ford," said Ford president and CEO Jim Farley. "The operating reality has changed, and we are redeploying capital into higher-return growth opportunities: Ford Pro, our market-leading trucks and vans, hybrids and high-margin opportunities like our new battery energy storage business."
The production employment implications are substantial. Ford and its subsidiaries plan to hire thousands across America, reinforcing what the company terms its leadership position as the top employer of US hourly autoworkers. This represents a strategic doubling down on American manufacturing, albeit in a form that looks rather different from the electric future Ford had been promising.
The Lightning becomes something else entirely
Perhaps nowhere is Ford's recalibration more visible than in the fate of the F-150 Lightning. The current generation has concluded production as the company redeploys employees to Dearborn Truck Plant to support a third crew for F-150 gas and hybrid truck production, partly necessitated by the Novelis fires. The next-generation Lightning will emerge not as a pure electric vehicle but as an extended-range electric vehicle, assembled at the Rouge Electric Vehicle Center in Dearborn, Michigan.
"The F-150 Lightning is a groundbreaking product that demonstrated an electric pickup can still be a great F-Series," said Doug Field, Ford's chief EV, digital and design officer. "Our next-generation Lightning EREV is every bit as revolutionary. It keeps everything customers love—100% electric power delivery, sub-5-second acceleration—and adds an estimated 700+ mile range and tows like a locomotive. It will be an incredibly versatile tool delivered in a capital-efficient way."
The messaging is carefully constructed to preserve the Lightning's credibility whilst fundamentally altering its character. Extended-range electric architecture represents a hedge against range anxiety whilst maintaining some electric driving credentials. Whether customers perceive this as revolutionary or as a retreat from first principles remains to be seen.
From cell production to energy storage
The announcement reveals that Ford's battery strategy has undergone an equally dramatic transformation. The company recently dissolved its joint venture with SK On, SK Battery America and BlueOval SK. Under the new arrangement, a Ford subsidiary will independently own and operate the Kentucky battery plants, whilst SK On assumes full ownership of the Tennessee facility.
Rather than betting all on automotive battery cell production, Ford is now pivoting toward battery energy storage systems. The carmaker plans to repurpose existing US battery manufacturing capacity in Glendale, Kentucky, to serve what it characterises as rapidly growing demand from data centres and electric grid infrastructure. The company intends to invest roughly $2 billion over the next two years to scale this business, targeting initial shipments in 2027 with 20 GWh of annual capacity.
The Kentucky site will manufacture 5 MWh+ advanced battery energy storage systems, producing LFP prismatic cells, battery energy storage system modules and 20-foot DC container systems. Ford positions this as leveraging more than a century of manufacturing expertise combined with licensed advanced battery technology, aiming to bring initial capacity online within 18 months.
Separately, the BlueOval Battery Park Michigan facility in Marshall will produce smaller amp-hour cells for residential energy storage solutions. This plant remains scheduled to begin manufacturing LFP prismatic battery cells in 2026, initially to power Ford's upcoming midsize electric truck built on the new Universal EV Platform.
The Universal EV Platform gambit
Ford's pure electric future now rests on its Universal EV Platform, a next-generation architecture engineered to underpin what the company describes as a high-volume family of smaller, highly efficient and affordable electric vehicles. The first vehicle from this platform will be a fully connected midsize pickup truck assembled at Louisville Assembly Plant starting in 2027.
Rather than pursuing the larger, more expensive electric vehicles where business cases have deteriorated due to lower-than-expected demand, high costs and regulatory changes, Ford is concentrating its pure electric vehicle development on segments where affordability might actually drive adoption. Whether this approach proves more successful than the company's previous electric ventures remains an open question.
Ford-Renault: Partnership pragmatism in Europe
Ford's European strategy reflects similar pragmatism. The company recently announced a strategic partnership with Renault to collaborate on electric vehicle development in both commercial and passenger segments. This follows a series of changes to Ford's European business, including new leadership to drive strategic direction and what the company terms a European product offensive bringing a new generation of multi-energy vehicles to customers.
The Renault partnership represents an acknowledgement that scale matters in electric vehicle development, particularly for smaller, affordable models where margins are compressed. By sharing development costs and platforms, Ford can maintain an electric presence in Europe without bearing the full weight of investment required to develop competitive products independently.
From EV-first to factory pragmatism as Ford recalibrates its production footprint
The $19.5 billion in special items Ford expects to record tells its own story about the cost of strategic recalibration. The OEM anticipates approximately $5.5 billion in cash effects, with the majority paid in 2026 and the remainder in 2027. These actions aim to drive what Ford describes as robust accretive returns and accelerate margin improvements across Ford Model e, Ford Pro and Ford Blue.
Ford Model e now targets profitability by 2029, with improvements beginning in 2026. The company has raised its 2025 adjusted EBIT guidance to approximately $7 billion, citing continued underlying business strength including cost improvement. Adjusted free cash flow guidance remains within the $2 billion to $3 billion range, trending towards the high end.
The market will judge whether this represents sound strategic repositioning or an expensive admission that Ford's electric ambitions exceeded its execution capabilities. What seems certain is that the American manufacturer's approach to electrification now looks markedly different from the pure-play strategy it was pursuing just months ago.
Ford's actions align with its stated goal of achieving carbon neutrality across vehicles, manufacturing facilities and supply chain no later than 2050. The company maintains this commitment whilst pursuing what it terms cleaner manufacturing, sustainable supply chains and breakthrough technologies to reduce emissions across its entire ecosystem. However, how multi-energy powertrains and continued internal combustion production reconcile with ambitious climate targets will require careful watching in the years ahead.
The company plans to report its fourth-quarter and full-year 2025 financial results on Tuesday, February 10. Those numbers will provide the first concrete indication of whether Ford's pivot proves as financially sound as management suggests.
