Ford is starting 2026 on a tumultuous note, with both bright and gloomy outlooks for the year ahead. The company has embarked on a new journey with massive charges totaling $19.5 billion in its attempt to restructure its electric vehicle roadmap, canceling several projects and turning to more profitable paths. The company’s plans to produce lithium iron phosphate cells and energy storage systems in partnership with CATL have just drawn scrutiny from a US House committee. It was then reported that Ford was planning a partnership with Chinese electric car giant Xiaomi, a rumor that was quickly denied by both brands.
Meanwhile, the company also got an engineering opportunity and designed the engine of the Red Bull Formula 1 racing car. The journey ahead, however, will not be an easy one for the brand. Ford boss Jim Farley recently claimed that Chinese car brands are an “existential threat” and could disrupt the North American market. The warning has already begun to take shape. China and Canada have struck a trade deal that ends the 100 percent tariff on Chinese electric cars and reduces it to just 6.1 percent, although there is a cap on the number of units imported.
The likes of BYD have already toppled Tesla as the world’s biggest electric vehicle brand, and now they’re knocking on the doors of the North American market. Additionally, advancements in the technology stack, particularly in terms of battery efficiency and cabin comfort, make Ford EVs seem overpriced. All of these market factors have triggered some major internal changes and restructuring at Ford. And what’s in store for the automaker in 2026 could very well change the company’s trajectory for years to come.
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Front view of the Ford Explorer EV. -John Keeble/Getty Images
The global electric vehicle market is expected to slow in 2026, according to a market study shared by Reuters. Furthermore, the end of the electric vehicle tax credit has slowed adoption in the North American market. S&P Global also notes that the current year will be a difficult one for electric cars in the US, 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 flagship ride into a hybrid.
The company is also canceling its electric vans for the European and North American markets. “Ford no longer plans to produce larger electric vehicles where the business case has eroded due to lower-than-expected demand, high costs and regulatory changes,” the company said in a press release. Instead of stopping at the premium segment, Ford says it will focus on a range of smaller, more efficient electric cars. The automaker notes that the first car to come out under this tweaked roadmap is a future electric pickup truck that will be built on the Universal EV platform and arrive next year.
On the bright side, Ford says it plans to offer cutting-edge technology for driving its electric car, which will cost around $30,000. This is a pretty serious departure, as such frontier technology is usually reserved for more premium races. As for the next-generation EV platform, the company says it reduces the parts used by 20 percent and speeds up the assembly process by a 15 percent margin, ultimately offering a lower cost of ownership than a Tesla Model Y.
Ford Ranger PHEV in yellow. – Torkgaur/Shutterstock
Ford’s withdrawal from the electric vehicle market was a bit surprising, though not shocking given the realities of the market. Now that aggressive electrification has been postponed, the company is focusing on offering more platform options to customers. For starters, Ford is turning the F-150 Lightning electric pickup truck into an Electric Extended Range Vehicle (EREV). Ford says the upcoming version will maintain quick acceleration, towing capacity and the ability to power your home as a backup source.
As for new launches, AutoExpress exclusively reports that a mid-size crossover inspired by the Bronco Sport is on the cards. The 2026 lineup also includes the updated 2026 Ford Mustang Shelby GT500 and the 2026 Ford Mustang Raptor. Ford’s website lists the 2027 Bronco RTR and the 2026 Mustang Dark Horse SC as upcoming vehicles. Beyond the current lineup of 2025 model-year electric vehicles, the Blue Oval offers the F-150 Hybrid, Maverick (in gasoline and Hybrid models), and 2026 Escape (in Hybrid and Plug-In Hybrid trims).
Combustion models in the lineup include the 2026 Ford Expedition, Escape, Explorer, Bronco (regular and sport models), and 2026 Mustang. The brand’s existing truck and van portfolio includes the Transit, Super Duty, and Ranger pickups in 2025 and 2026 model year configurations. That’s a pretty loaded lineup and offers plenty of options for buyers of all shapes and sizes. However, the EV pullback will sting as Tesla discontinues its Model S and X models, leaving other brands to try to fill the void. Ford plans to ramp up truck production for the US market and plans to repurpose its Tennessee truck plant and Ohio assembly plant to launch Built Ford Tough truck models and the Ford Pro series of ICE and hybrid vans.
Top view of Red Bull F1 car. – Ford
It is often noted that cutting-edge technology that appears in F1 cars eventually makes its way to consumer cars. Steering wheel controls, carbon fiber chassis and aerodynamic lines are some of them. For Ford, returning to F1 with a Red Bull partnership is quite historic. Ford’s beginnings as an automobile company are actually linked to an unlikely victory in a race in 1901 at the hands of founder Henry Ford. Ford is the third most successful engine manufacturer in racing history with 174 Grand Prix titles to its name. After a long hiatus, Ford is finally returning to Red Bull as an engine supplier.
This is an opportunity for Ford to once again transmit some engineering magic from the track to consumer cars. And it looks like the company wants to take advantage of this opportunity. “In the ultimate laboratory, the ultimate torture test for high-performance hybrids, there is no better way to develop our capabilities and prove them than in the competitive landscape of F1,” Ford Racing CEO Will Ford told The New York Times. “Ultimately, everything we do and learn through this Red Bull partnership will translate into our production vehicles for our customers.”
But Ford’s plans go beyond the F1 tarmac. Ford boss Jim Farley says the company’s time designing F1 gear has provided insight into the secret sauce to help beat rising Chinese car brands. “We need these capabilities from Formula 1 and we can put them right in the Transit van,” Farley said. It will take some time, but a bold promise nonetheless.
BlueOval Construction Battery Park Michigan – Ford
In December, while announcing its EV shift, Ford also revealed that the company is building a battery energy storage business. “Ford plans to begin shipping BESS systems in 2027 with an annual capacity of 20 GWh,” the company said in a press release. The company hopes to meet strained grid demands and also meet the needs of data centers, which are so power-hungry that tech giants like Google and Meta are directly funding nuclear reactors. Ford will start by repurposing a factory in Kentucky and plans to invest $2 billion over the next two years to make 5 MWh+ of advanced battery energy storage systems (BESS).
According to CNBC, the company has already spent $10 billion on the two facilities that will be a hub for its energy storage business. To operate the battery factories, the company has also entered into contracts with SK On, SK Battery America and BlueOval SK. In addition, the automaker will also produce smaller battery cells intended for residential use at the BlueOval Battery Park Michigan plant. That facility will also produce prismatic LFP battery cells for the company’s Universal EV Platform, which will make its debut on a mid-size electric truck in 2027. Lisa Drake will lead the effort as president of Ford Energy.
Ford is not the only player in this segment. Tesla already has a massive energy storage business. General Motors, under the GM Energy label, is also making solid progress. The company announced in October that sales volume had increased fivefold in a year. Notably, the company said that seven out of ten GM-branded electric cars are now sold with a GM product. The timeline of Ford’s goals for battery power and next-generation electric vehicles suggests the company is aiming for a similar outcome.
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