Ford Motor Company has announced plans to cut 4,000 jobs in Europe and the U.K. by the end of 2027, attributing the decision to sluggish electric vehicle (EV) sales, economic pressures, and Chinese competition in the automotive sector.

The automaker said most layoffs would occur across their two German plants.

Of the total job cuts, 2,900 positions will go in Germany, 800 in the U.K., and 300 in other parts of Europe. Ford, which employs 28,000 workers across Europe, is restructuring to align with changes in the auto industry as it pivots toward cleaner technology.

“The global auto industry continues to be in a period of significant disruption as it shifts to electrified mobility,” Ford said in a statement.

The transformation “is particularly intense in Europe, where automakers face significant competitive and economic headwinds, while also tackling a misalignment between CO2 regulations and consumer demand for electrified vehicles.”

Stricter Emissions Standards Across Europe

Ford’s announcement came as European automakers prepare for stricter emissions standards in 2025 and a longer-term goal of achieving zero emissions by 2035.

By 2025, manufacturers are required to achieve a 15 percent reduction in CO2 emissions per kilometer compared to 2021 levels for their new passenger vehicle fleets.

Despite these targets, sales of EVs have not met expectations, partly due to inflation and the withdrawal of government incentives in key markets like Germany.

Data from the European Automobile Manufacturers’ Association suggested transactions dropped 5.8 percent during the first nine months of the 2024.

Major German Workforce Reductions

The trend isn’t just limited to EVs, whose overall sales fell by 15.3 percent during the first nine months of the year compared to the same period in 2022, leading to a decline in its market share from 3.5 percent to 3 percent.

The workforce reductions will focus on Ford’s Cologne plant in Germany, where production of EV models such as the Capri and Explorer is already seeing scaled-back operations.

In a bid to manage costs, the company plans to implement reduced working hours for employees at the facility, dubbed the “Cologne Electrification Center.”

The layoffs coincide with the approaching centenary of Ford’s operations in Germany, with the Cologne plant established in 1931.

Ford also reported a 26 percent drop in net profit during the third quarter, amounting to $892 million. The company attributed part of the decline to a $1-billion accounting charge for canceling a planned three-row electric SUV.

Ford’s Call for CO2 Compliance Support

A letter written by John Lawler, Ford’s vice chairman and CFO, addressed the company’s concerns to the German government. In it, he called for policy changes to boost EV market growth.

Ford faces intensified competition from subsidized Chinese EV manufacturers, who are gaining market share in Europe.

“What we lack in Europe and Germany is an unmistakable, clear policy agenda to advance e-mobility, such as public investments in charging infrastructure, meaningful incentives to help consumers make the shift to electrified vehicles, improving cost competitiveness for manufacturers, and greater flexibility in meeting CO2 compliance targets,” he wrote.

Ford is not alone in its difficulties. Volkswagen has warned that it may close up to three German plants as it confronts similar challenges in the EV market. The European Automobile Manufacturers’ Association has called for a more thorough review of CO2 limits set to take effect in 2026, arguing that existing timelines may place undue strain on automakers.

This article includes reporting from The Associated Press.