Ford is off to a tumultuous start to 2026, with prospects for the year ahead both bright and bleak. The company has embarked on a new journey, spending a whopping $19.5 billion to restructure its electric vehicle roadmap, canceling multiple projects and shifting its focus to more profitable avenues. The company’s plans to partner with CATL to produce lithium iron phosphate batteries and energy storage systems just drew scrutiny from a U.S. House of Representatives committee. Reports later emerged that Ford was planning an electric vehicle partnership with Chinese giant Xiaomi, but the rumors were quickly denied by both brands.
At the same time, the company also received a great engineering opportunity to design Red Bull’s Formula One racing engine. However, the journey ahead won’t be smooth sailing for the brand. Ford CEO Jim Farley recently claimed that Chinese auto brands are an “existential threat” that could disrupt the North American market. The warnings are starting to take shape. China and Canada have reached a trade deal that ends 100% tariffs on Chinese electric vehicles and reduces them to 6.1%, but there is a cap on import quantities.
Companies such as BYD have overtaken Tesla as the world’s largest electric car brand, and now they are knocking on the door of the North American market. Additionally, advances in the tech stack, especially in battery efficiency and in-car convenience, make Ford electric vehicles look overpriced. All of these market factors triggered some major internal changes and restructuring at Ford. The automaker’s plans for 2026 will likely change the company’s trajectory for years to come.
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The global electric vehicle market is expected to slow down in 2026, according to market research shared by Reuters. Additionally, the end of the EV tax credit has slowed adoption in the North American market. S&P Global also noted that this year will be a difficult year for electric vehicles in the United States, and Ford is no exception and has adjusted its electrification plans accordingly. The biggest casualty of this new shift is the F-150 Lightning electric truck, which is no longer part of Ford’s immediate plans. Instead, the company is turning the iconic ride into a hybrid.
The company has also canceled delivery of electric vans to European and North American markets. “Ford no longer plans to build some large electric vehicles because their business cases have been eroded by lower-than-expected demand, high costs and regulatory changes,” the company said in a press statement. Ford said it would focus on a range of smaller, more efficient electric vehicles rather than compete at the premium end of the market. The automaker noted that the first vehicle to be launched under the revised roadmap is an upcoming electric pickup truck that will be built on GM’s electric vehicle platform and will go on sale next year.
On the bright side, Ford says it plans to offer cutting-edge eyes-closed driving technology in its affordable electric cars, which will cost about $30,000 each. This is a fairly significant departure, as this kind of cutting-edge technology is usually reserved for fancier rides. For its next-generation electric vehicle platform, the company said it uses 20% fewer parts and speeds up the assembly process by 15%, ultimately achieving a lower cost of ownership than the Tesla Model Y.
Ford’s exit from the EV market is somewhat surprising, though not shocking, given market realities. Now that aggressive electrification has been delayed, the company is focused on giving customers more platform choices. First, Ford is converting its F-150 Lightning electric pickup truck into an extended-range electric vehicle (EREV). Ford says the upcoming version will maintain fast acceleration, towing capabilities and the ability to power your home as a backup power source.
In terms of new launches, AutoExpress exclusively reports that a midsize crossover inspired by the Bronco Sport is coming soon. The 2026 lineup also includes the updated 2026 Ford Mustang Shelby GT500 and 2026 Ford Mustang Raptor. Ford’s website lists the 2027 Bronco RTR and 2026 Bronco Dark Horse SC as upcoming vehicles. In addition to the current 2025 electric vehicles, the Blue Oval also offers the F-150 Hybrid, Maverick (gasoline and hybrid models) and 2026 Escape (hybrid and plug-in hybrid models).
Combustion models in the lineup include the 2026 Ford Expedition, Escape, Explorer, Bronco (regular and sport), and the 2026 Bronco. The brand’s existing truck and van portfolio includes Transit, Super Duty and Ranger pickup trucks, covering 2025 and 2026 model year configurations. It’s a very busy lineup, with plenty of options for buyers of all form factors. However, the retreat from electric vehicles will be painful, as Tesla will discontinue the Model S and Model X, leaving other brands to try to fill the gap. Ford plans to increase truck production for the U.S. market and plans to repurpose its Tennessee truck plant and Ohio assembly plant to launch Ford Rugged Truck models as well as the Ford Pro Series internal combustion engine and hybrid vans.
It’s often observed that cutting-edge technology seen in F1 cars eventually trickles down to consumer cars. These include steering wheel controls, carbon fiber chassis and aerodynamic lines. For Ford, returning to F1 in partnership with Red Bull is historic. Ford’s beginnings as an automobile company are actually tied to founder Henry Ford’s improbable victory in a race in 1901. Ford is the third most successful engine manufacturer in racing history, with 174 Grand Prix wins. After a long hiatus, Ford has finally returned to Red Bull as an engine supplier.
This is another chance for Ford to transfer some of its engineering wizardry from the track to consumer cars. The company seems to want to seize this opportunity. “There’s no better way to advance our capabilities and prove it than in the competitive landscape of F1 by going into the ultimate laboratory and putting a high-performance hybrid to the ultimate torture test,” Ford Racing general manager Will Ford told The New York Times. “Ultimately, everything we do and learn by working with Red Bull will be incorporated into the vehicles we produce for our customers.”
But Ford’s plans extend beyond the F1 tarmac. Ford Chief Executive Jim Farley said the company had a deep understanding of the secrets that could help defeat rising Chinese car brands when designing its F1 equipment. “We need these features from a Formula 1 car and we can put them in a transporter,” Farley said. This will take some time, but is still a bold commitment.
In December, when Ford announced its shift to electric vehicles, it also revealed that the company was building a battery energy storage business. “Ford plans to begin delivering BESS systems in 2027 with an annual capacity of 20 GWh,” the company said in a press statement. The company hopes to take advantage of strained grid demands and meet the needs of data centers, which are so hungry for power that tech giants like Google and Meta are directly funding nuclear reactors. Ford will first repurpose a factory in Kentucky and plans to invest $2 billion over the next few years to produce more than 5 MWh of advanced battery energy storage systems (BESS).
The company has spent $10 billion to build the two facilities, which will become the centerpiece of its energy storage business, CNBC reported. To operate the battery factory, the company has also signed agreements with SK On, SK Battery America and BlueOval SK. In addition, the automaker will produce smaller batteries for residential use at its BlueOval Battery Park plant in Michigan. The plant will also produce lithium iron phosphate prismatic batteries for the company’s universal electric vehicle platform, which will debut in mid-size electric trucks in 2027. Lisa Drake will lead this effort as president of Ford Energy.
Ford isn’t the only player in this space. Tesla already has a massive energy storage business. General Motors (GM Energy) also made solid progress. The company announced in October that sales had grown fivefold in a year. Notably, the company said seven out of 10 electric vehicles sold under the GM brand are now sold alongside GM products. Ford’s battery energy goals and timeline for next-generation electric vehicles suggest the company is pursuing similar results.
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Read the original article on SlashGear.