by Will Jones
“I think the customer has spoken. That’s the punchline,” said Jim Farley, the Chief Executive of Ford, as he unveiled a $5 billion annual loss – joining the wider car industry in facing up to a catastrophic collapse in the EV market. The Telegraph has more.
The American boss was speaking last week as his company unveiled a $5 billion (£3.7 billion) annual loss, barely two months after it had booked a shock $19.5 billion write-down.
The cause? An aggressive bet on electric vehicles (EVs) that backfired spectacularly.
In 2025, sales of the Mustang Mach-E crossover and the F-150 Lightning pickup truck – once hailed by Farley as the “truck of the future” – went into reverse.
Worse, the electric Model-E division has booked losses of more than $13 billion since 2023.
Now it has consigned the F-150 to the dustbin and has scrapped much of its future EV plans, with the company set to put a greater emphasis on hybrids.
Ford isn’t the only automotive giant counting the costs of a failed bet on electric.
In the past year, the world’s biggest carmakers have written off more than $60 billion from their balance sheets as they retreat from an EV boom that never was.
The figure includes a €22 billion (£19 billion) charge reported by Vauxhall owner Stellantis, along with a $7.6 billion hit to General Motors, €5.1 billion at Volkswagen Group, $4.5 billion at Honda and $1.2 billion at Volvo, among others.
“Most of the Western carmakers are now facing big issues,” says Felipe Muñoz, of Car Industry Analysis.
Broadly speaking, EV sales are growing. But a rapid shift to electric that both carmakers and politicians had hoped for has failed to materialise. “Many drivers are still not comfortable making the shift,” says Muñoz.
At the same time, Net Zero regulations are beginning to bite in the UK and Europe – with companies facing fines if they cannot meet increasingly stretching targets – just as low-price competitors from China have arrived to undercut them.
Many of those Chinese manufacturers are themselves trying to outrun a crisis, as sales at home grind to a halt.
All across the world, a grim reality for carmakers is setting in: drivers simply don’t want EVs in the volume they hoped.
“The plans they set out were too ambitious – and what we’re seeing now is the reality,” says Munoz.
Much of today’s mess can be traced back to the heady days of the pandemic, when strange things were happening in the car market.
As the spreading coronavirus shut down factories around the world and governments panicked, subsidies were lavished on electric cars to try to support the flagging automotive industry.
This also came as central banks across Europe were slashing interest rates to boost their flagging economies, which made borrowing cheaper.
At one stage, it was so cheap to buy an electric car in Germany that models such as the Renault Zoe or even the Mercedes-Benz EQC crossover could be leased for less than the price of a mobile phone contract.
At the same time, governments were strengthening Net Zero policies. In Britain, the then Prime Minister Boris Johnson announced a ban on the sale of new petrol cars by 2030; in America, Joe Biden proposed a $174 billion stimulus package for EVs.
Tesla, the electric carmaker founded by Elon Musk, was also being eyed enviously by its more traditional rivals – as sales of its Model 3 and Model Y cars grew rapidly.
EV sales were being supported by a sharp rise in petrol prices that followed the outbreak of the Ukraine war, which made EVs look cheaper relative to internal combustion engine (ICE) cars.
Against this backdrop, things only seemed to be heading in one direction.
In response, many car companies announced ambitious plans to electrify their line-ups.
Jaguar Land Rover announced that Jaguar would become an “all-electric” brand by 2025. Ford pledged to completely electrify by 2030, while VW doubled its end-of-decade target for EV sales from 35% to 70%.
But in the years since those announcements, EV sales have slowed as many of the temporary factors that boosted the market have receded.
Worth reading in full.
Why does Jim Farley still have a job? What am I missing?
He means well.
He knows people.
I only have one word, government.
I’d weigh in here, and still might, but not for now. The knees are jerking. Whoever said that the leftoids are captured by groupthink was only half right. LOL
Translation: I can’t refute anything that has been said, but my ego won’t let me leave without at least trying to pretend I am superior to everyone who isn’t me.
The EV debacle should come as no surprise since it’s a classic example of what happens when governments and manufacturers blindly take the predictions and recommendations of environmental dreamers, climate alarmists, politicians, bureaucrats and academics. Few or even none of these conducted proper surveys of consumers to get preliminary estimates of whether they’d be willing to pay inflated prices to supposedly forestall a climate crisis that no one had proved even existed yet. Instead taxpayers’ money was thrown blindly at solutions for which there was no problem in the first place. Then as all the shortcomings of EVs became evident, sales dropped rapidly and the manufacturers who had priced them too high from the outset found themselves making production cuts while swallowing their losses. Hopefully some people of influence and those who prematurely got aboard the EV bandwagon will learn from this fiasco, but I wouldn’t put money on it.
State intervention in the workings of the market seem to be universally disastrous.
U.S The definitive numbers — the fad is fading. 2024
2025
These people aren’t stupid. The US govt was pushing EV’s hard and put a lot of money up for grabs for those willing to go along with the game.
Trump’s regaining the office has made it clear that tax dollars will not be flowing to the green stuff.
I really wonder how much of these “write offs” represent actual hard money losses, or just paper nonsense.
I have a PHEV with 80000 miles on it. It is seven years old. I love it, but, I am starting to wonder when the battery will die. They only have about 100,000 mile warranty. A replacement costs about $10,000. Luckily, the battery was replaced a couple years after I bought the car because of fire hazard, so, it is newer than my car. Still, resale value won’t be much, even thought I have kept it in very good condition. My daughter’s Corolla went for 23 years. It was still going fine when she finally decided it was time for a modern car.
If you take care of it, many IC engines will last over 1,000,000 miles.
Here at 2500m in Teller County , ~ 900m above Colorado Springs , I want a hybrid as my next vehicle , for the regenerative breaking as much as anything else .