The automotive industry’s transition to electric vehicles continues to expose the growing pains of even the biggest players. On Wednesday, Ford announced plans to cut 4,000 jobs across Europe by the end of 2027, citing financial challenges tied to the EV shift and rising competition. The automaker is also scaling back operations at its Cologne plant in Germany, attributing the move to sluggish demand for its EVs.

Ford pointed to “unprecedented competitive, regulatory, and economic headwinds” as the driving forces behind the cuts, emphasizing that its European passenger vehicle business has endured “significant losses” in recent years.

The Job Cuts Amount to 2.3% of Ford’s Global Workforce

The planned reductions represent nearly 14% of Ford’s European workforce or 2.3% of its global personnel. Unsurprisingly, Germany and the UK will bear the brunt of these layoffs, with only “minimal reductions” expected across other European markets. The cuts are set to unfold over the next three years, with Ford pledging to consult with social partners throughout the process.

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Adding to the grim outlook, Ford announced more short-time working days at its Cologne facility for the first quarter of 2025. The company cited “lower-than-expected” EV demand as the reason, exacerbating concerns over the viability of its current strategy.

The facility is home to production for the fully electric Ford Explorer and Capri, which share their underpinnings with the VW ID.4 and ID.5. This measure is a follow-up to the recent adjustment on the EVs production schedule, with employees already working alternate weeks until the end of the year.

Emission Targets and Consumer Disconnect

Dave Johnston, Ford’s European vice president for Transformation and Partnerships, defended the job cuts as a painful but necessary step: “It is critical to take difficult but decisive action to ensure Ford’s future competitiveness in Europe.” Yet the broader picture reveals frustration with the regulatory environment.

As with most automakers, Ford is not happy with the strict emission regulations in Europe, saying there is a “misalignment” between CO2 targets and consumer demand for electrified vehicles.

Ford Calls for Policy Overhaul

This disconnect has prompted Ford to escalate its lobbying efforts. In a recent letter to the German government, CFO John Lawler urged policymakers to improve market conditions for EVs. The letter outlined key asks, including “public investments in charging infrastructure, meaningful incentives, improved cost competitiveness, and greater flexibility in meeting CO2 compliance targets.”

While Ford is clearly seeking ways to navigate the EV transition, its European troubles underline a larger industry-wide challenge: balancing regulatory pressure with market realities. For now, the road ahead for Ford, and others, remains bumpy.

Ford is cutting back on production of its brand new European EVs before most people on the continent have even seen either car on the road. The long-running Fiesta died so Ford could repurpose its Cologne plant to build the Explorer SUV and Capri crossover, but both models are feeling the effect of a slowdown in the EV market.

The German factory received a $2 billion makeover to get it ready to build the new Ford EVs which are based on VW’s MEB electric platform, and was supposed to prepare the automaker for the huge EV demand the car industry was sure was coming.

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But the country’s Kölner Stadt-Anzeiger revealed that workers at the Cologne site have been told to work fewer hours, Ford having applied to German government to gain approval to temporarily move its staff to part-time roles. Employees will only work alternate weeks between now and the end of the year, removing three weeks from the production cycle.

“We can confirm that Ford will apply for short-time work from the Federal Employment Agency due to the rapidly deteriorating market conditions for electric vehicles,” a Ford spokeswoman told the news site. “The significantly lower than expected demand for electric vehicles, especially in Germany, requires a temporary adjustment of production volumes.”

Ford began Explorer production in June and added the Capri in September, a couple of months after the crossover made its debut at the Goodwood Festival of Speed. But Kölner Stadt-Anzeige has seen documentation confirming that the plant is building far more EVs than it can sell and claims that even after New Year the production lines will be forced to idle on certain days, and daily output will fall from 630 to 480 units.

The end of EV subsidies in Europe, poor consumer confidence, and discussion about rolling back the 2035 ban on combustion engines have conspired to limit demand for EVs on the continent. But Ford isn’t only suffering in Europe. Although its EV sales in the US have risen, Ford recently announced that it was scrapping planned electric SUVs and would build hybrids instead.