In the ever-evolving landscape of the global energy transition, recent moves by major players like BP and Ford signal a potential reevaluation of aggressive Net Zero commitments. As economic pressures mount and profitability takes center stage, these companies’ decisions to scale back investments in renewables and electric vehicles (EVs) could foreshadow a broader pushback against the high costs and uncertain returns of the energy transition. This article explores BP’s latest financial maneuvers, including a significant write-off, alongside Ford’s massive EV retreat, and examines whether these are harbingers of a global shift.
BP’s Earnings and the $4-5 Billion Write-Off
BP’s third-quarter 2025 results, released in November, showed an underlying replacement cost profit of $2.2 billion, down slightly from $2.4 billion in the previous quarter.
Reported profit stood at $1.2 billion, impacted by inventory holding losses and adjusting items, including $0.8 billion in net impairments and losses on asset sales.
The gas and low-carbon energy segment contributed $1.5 billion in underlying profit before interest and tax, supported by higher production but offset by lower realizations.
Looking ahead to the fourth quarter, BP’s January 2026 trading statement flagged significant headwinds, including up to $5 billion in post-tax impairments primarily linked to its energy transition businesses and equity-accounted entities.
This $4-5 billion write-off aligns with BP’s strategic pivot back to fossil fuels, reflecting challenges in low-carbon ventures amid softer market conditions. The impairments are expected to exclude Castrol divestment proceeds and focus on gas and low-carbon assets, helping reduce net debt to $22-23 billion by year-end 2025.
Full-year 2025 results are slated for release on February 10, 2026.
This move underscores BP’s efforts to streamline operations, with divestments totaling $5.3 billion in 2025—exceeding guidance—and targeting $20 billion in asset sales by 2027 to deleverage.
BP’s Investments in Wind and Solar: A Costly Bet
BP has poured billions into renewables over the years, aiming to build a diversified portfolio. In solar, BP fully acquired Lightsource bp, Europe’s largest solar developer, to scale up investments in what was seen as a high-return area compared to wind.
Lightsource bp boasts a significant track record, with executed U.S. offtake agreements across 11 states and billions in capital financing raised since 2019.
However, exact cumulative spending figures are opaque, but BP’s annual renewables outlay was slashed from $7 billion to a maximum of $2 billion about a year ago as part of its fossil fuel refocus.
In wind, BP divested its U.S. onshore wind business in July 2025, selling 10 assets with 1.3 GW net capacity to LS Power for an undisclosed sum.
This followed years of impairments, with BP reporting $6.9 billion in charges for 2025 alone, part of a pattern including $5.7 billion in 2023 and $5.1 billion in 2024.
BP is now seeking a partner for Lightsource bp to adopt a “capital-light” approach, prioritizing returns over aggressive expansion.
These retreats highlight the financial strain of renewables, where subsidies and market dynamics have not always delivered expected profitability.
Ford’s $19.5 Billion EV Pullback
Ford’s December 2025 announcement of a $19.5 billion charge marks a dramatic retreat from its EV ambitions, driven by weaker demand, high costs, and regulatory shifts under the Trump administration.
The writedown includes $8.5 billion for canceled EV models, $6 billion from dissolving a battery joint venture with SK On, and $5 billion in program-related expenses.
Ford is pivoting to hybrids, trucks, vans, and battery energy storage, expecting its Model e EV unit to reach profitability by 2029, with improvements starting in 2026.
This includes halting production of the F-150 Lightning indefinitely and converting a Kentucky site for other uses, with $2 billion invested in scaling battery storage over the next two years.
The cash impact is estimated at $5.5 billion, mostly in 2026-2027.
Ford’s move reflects broader industry challenges, as EV adoption slows amid policy changes and consumer preferences leaning toward hybrids.
The Broader Pushback Against Net Zero
Are BP and Ford’s actions the first signs of a global retreat from Net Zero? Evidence suggests yes. Global emissions have risen 9% since 2015, with the energy transition progressing at half the pace needed for Paris Agreement goals.
McKinsey reports that less than 15% of required low-emissions technologies have been deployed, with offshore wind lagging due to high costs and inflation.
Energy executives now expect net zero by 2070 or later (44% in 2025, up from 31% in 2024), citing affordability and security concerns.
Political “greenlash” is evident: The U.S. withdrawal from Paris in 2025 prioritizes energy security, while Europe’s elections show backlash against costly policies.
The IMO delayed its shipping Net Zero Framework by a year, pushing implementation beyond 2028.
Companies like Shell and Equinor are similarly trimming renewables, signaling that without subsidies, many transition investments falter.
This could redirect funding toward fossil fuels, where returns are more predictable.BP’s Future: Beyond Recovery or Headed for Breakup?BP’s repeated impairments and asset sales raise questions about its long-term viability in its current form. With net debt at $26.1 billion in Q3 2025 and activist pressure from Elliott Investment Management, speculation of a 2026 breakup is rife.
Chair Helge Lund plans to exit in 2026, following CEO Murray Auchincloss’s ouster, amid calls for faster changes.
New CEO Meg O’Neill from Woodside is tasked with “clearing the decks,” potentially including scrapping renewables targets and further divestments.
Analysts suggest a breakup could unlock value, but it risks fragmenting BP’s integrated model. With office job cuts of 6,200 by end-2026, BP aims for efficiency, but sustained low-carbon losses may force more radical restructuring.
Implications for Funding and the Energy Transition
BP and Ford’s retreats highlight a funding dilemma: Net Zero requires trillions in investment, but without clear profitability, capital is fleeing. Global clean energy spending hit records in 2025, yet progress stalls as subsidies wane.
This could signal a pragmatic recalibration, prioritizing energy security and economic growth over ambitious timelines. For investors and policymakers, it’s a wake-up call—Net Zero may need rethinking to balance ideals with reality.As 2026 unfolds, watch for more companies to follow suit, potentially reshaping the energy landscape.
Stuart Turley is the host of The Energy News Beat Channel, focusing on critical energy developments.
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