Ford Motor Company said Monday it expected to take about $19.5 billion in charges, mainly tied to its electric-vehicle business, a massive hit as the automaker retrenches in the face of sinking EV demand.

The sum is among the largest impairments taken by a company and marks the U.S. auto industry’s biggest reckoning to date that it can’t realize its electric-vehicle ambitions anytime soon.  

Ford, which has lost $13 billion on its EV business since 2023, said it would bolster its lineup of gas-powered vehicles while shifting to hybrid and so-called extended-range electric vehicles that include onboard gasoline engines.

The goal is to pull back from loss-making assets and redeploy capital designated for EVs to models with higher profitability. 

“Instead of plowing billions into the future knowing these large EVs will never make money, we are pivoting,” Ford Chief Executive Jim Farley said in an interview. “We now know enough about the U.S. market where we have a lot more certainty in this second inning” of reduced-emissions powertrains, he said.

Regulatory changes and lackluster demand from Americans are forcing U.S. automakers to abandon plans to quickly step to an electric-vehicle future. Ford, which had bet big on EVs, is now making one of the industry’s biggest changes to its business.

The company said it remains on track to produce a $30,000 EV pickup for sale by 2027, which the company says will be the first in a new string of low-cost EVs. “Now this is the core of our EV strategy in America,” Farley said. “We’ve got to land the plane.”

The company will stop making an EV version of its F-150 pickup truck, called the Lightning, and will instead make an extended-range version of the truck. Last month, The Wall Street Journal reported company executives were discussing scrapping the EV version.

Ford said that by 2030 roughly half its global volume will consist of hybrids, extended-range vehicles and EVs, up from 17% this year. The shift to hybrids is accelerating around the world, as those vehicles are increasingly seen as more affordable and practical to consumers who are reluctant to commit to pure EVs.

To boost revenue, Ford will turn its Kentucky EV-battery factory into a battery-storage business for customers such as utilities, wind- and solar-power developers, and massive data centers that train artificial intelligence.

Ford said it plans to hire thousands of new employees across the U.S., though some 1,600 workers at the battery plant will be laid off while it gets repurposed.

In 2024, Ford reported net income of $5.9 billion on $185 billion in revenues. 

The $19.5 billion includes $6 billion tied to the breakup of a joint venture with SK Group to build EV batteries in the U.S. Ford will take most of the charges in the fourth quarter, though some will come later. 

Also on Monday, the company raised its earnings forecast for the year to $7 billion in adjusted pretax earnings, up from $6 billion to $6.5 billion. 

The company’s pivot from all-electric vehicles is a fresh sign that America’s roadways—after a push to remake them—will continue to look in the near future much like they do today, with a large number of gas-powered cars and trucks and growing use of hybrids. 

The Biden administration, in particular, sought to prod the auto industry into a full and rapid embrace of EVs, but faced resistance from many Republicans. This year, the Trump administration did away with some of the strictest clean-air and fuel economy mandates.

Many consumers, meantime, stayed away from EVs because of high sticker prices, worries over battery range and access to charging stations.

Because of the combination of consumer hesitancy and regulatory changes, automakers have been freed up to trim their electric ambitions but have had to slash the book value of their EV assets.

Ford, in addition to canceling the all-electric F-150, is scrapping plans for another electric truck and for electric commercial vans. 

General Motors, forced to retreat from plans to have an all-EV lineup by 2035, wrote down $1.6 billion in EV assets in the third quarter and signaled that more write-downs are in store as it pulls back on EV capacity. GM recognized that equipment it bought for a planned EV factory was wasted once the company decided to make gas vehicles there instead.

Ford had invested heavily in moving to EVs, but had recently begun dialing back its efforts.

In Kentucky, Ford and its former partner SK spent nearly $6 billion to build what they said would be the U.S.’s biggest single-site battery complex. But Ford and SK mothballed one of the two buildings on the site, never installing equipment in the newly built factory. The other plant, meanwhile, operated well below capacity making batteries for the now-canceled electric F-150.

Ford plans for the site to make stationary batteries for data centers, rather than batteries for EV vehicles.

Automakers and battery companies have been racing to repurpose EV battery plants to serve the growing data center and utility markets, instead of vehicles. GM, South Korean conglomerate LG and Jeep parent Stellantis have turned toward stationary batteries.

The moves reflect automakers’ diagnosis that, when it comes to EVs, Americans want smaller, affordable models like those made by Chinese automakers and sold outside the U.S.

Farley said the high cost of EV batteries, in particular, proved too much to overcome for the big trucks at the center of the company’s strategy. That, coupled with the damping of a post-Covid rush on EVs and demands of truck buyers, doomed the strategy.

Farley said the company will be better off with a variety of vehicle types, rather than going all-in on a single technology.

“This is a better solution for customers,” Farley said. “None of us really know what the future is going to be, but Ford knows enough about the future to know that this mix is the right mix.”

Write to Sharon Terlep at sharon.terlep@wsj.com