Trump has changed the future of the car industry |
For decades, US car manufacturers have pursued global strategies based on global platforms and global supply chains. Ford’s decision to take a $US19.5 billion ($30 billion) writedown of its electric vehicle assets and investments represents a major retreat from that strategy.
In effect, Ford has decided to walk back from its plans to compete with China for the EV future of the industry and instead focus on building vehicles for the US domestic market. General Motors, which has already written off $US1.6 billion of EV investment, and other US manufacturers will inevitably follow suit.
Trump, who has labelled climate change a “con job”, has relaxed emissions standards and wiped out the fines car makers used to have to pay for breaching fuel-economy standards.Credit: AP
An exit from the EV market isn’t quite what Ford has outlined.
In taking the writedown, killing off existing production of its larger EVs and its plans for more models and converting its battery-making facilities to an energy storage business the company said it would still make some smaller EVs alongside its traditional internal combustion models.
Its emphasis on new generation technologies would now, however, be hybrids, or vehicles with electric powertrains whose range will be extended by small petrol-powered generators.
Ford is bowing to a reality whose shape changed dramatically with the re-entry of Donald Trump to the White House.
The Biden administration, with the $US7500 tax credit for EV purchases that dates back to 2008 and emissions and fuel efficiency standards within its Inflation Reduction Act, had tried to create a bridge for the vehicle industry so that it could scale up to an EV future.
Trump’s One Big Beautiful Bill Act killed off most of the key elements of the Inflation Reduction Act, including the tax credits.
Trump, who has labelled climate change a........