By Nora Eckert
Ford Motor Co said Wednesday it has scrapped plans to launch a three-row electric SUV and postponed the launch of a new electric version of its best-selling F-150 pickup truck, the latest delay by the U.S. automaker as it focuses on cutting costs to stimulate demand.
Ford (NYSE:), General Motors (NYSE:) and other automakers have delayed or canceled new electric models to avoid spending heavily on vehicles that consumers aren’t buying as quickly as expected.
“With pricing and margin pressures, we have made the decision to adjust our product roadmap, technology and manufacturing footprint to achieve our goal of positive EBIT (earnings before interest and taxes) within the first 12 months of launching all new models,” John Lawler, Ford’s chief financial officer, said in a statement.
Ford also said it will add a new pickup truck and a new midsize electric truck to its future lineup as it doubles down on a strategy it has used in recent years, focusing on segments where it already has strength: pickup trucks and commercial vehicles. Ford shares rose 1.1%.
Instead, the Dearborn, Michigan-based automaker has invested more in hybrid vehicles, which combine an electric motor with a gasoline engine. Toyota Shares of Toyota (NYSE:) and other automakers have surged as consumers turn to the technology as a lower-cost halfway house between gas-powered and electric vehicles.
“The criticism Ford will face is why its product plan wasn’t more flexible from the start, why it was slow to implement these changes, and why investors will need to wait until next year for a comprehensive update,” Bernstein analyst Daniel Roeska said in a research note.
Ford CEO Jim Farley said one of the key solutions to slowing the growth of electric vehicle sales is to cut production costs around those models. That’s a key goal for the future health of the company, which is expected to lose up to $5.5 billion on electric vehicles this year alone.
As Chinese rivals and Tesla continue to cut the cost of producing electric vehicles, Farley said he’s betting Ford’s future on its California-based team, which has been developing an affordable electric vehicle architecture. The first vehicle to use the new technology will be a midsize electric truck that will launch in 2027.
The automaker will take a special non-cash charge of about $400 million to write down certain assets related to its planned three-row SUV, which could also result in additional expenses and cash outlays of up to $1.5 billion.
Given the increased focus on hybrids, Ford said its share of annual capital spending devoted to pure electric vehicles will fall to about 30% from 40%.
“affordable battery”
Ford said it will begin building an electric commercial truck at its Ohio assembly plant in 2026, hoping to build on its success in the gas-powered commercial vehicle market.
Meanwhile, the launch of Ford’s long-awaited F-150 Lightning electric truck successor has been delayed again, now to the second half of 2027 instead of the planned 2025 launch, a move the company said would allow it to take advantage of lower-cost battery technology.
While Ford is shelving plans for a three-row electric SUV, it is moving toward hybrids in the segment, aiming to lure customers with longer-range vehicles for road trips.
Ford also said it would move some battery production to qualify for incentives under the Inflation Reduction Act (IRA) and continue to cut costs, a top priority for Farley.
The automaker will move some production of the batteries it makes with South Korean battery partner LG Energy Solution for the Mustang Mach-E from Poland to the Netherlands, Michigan.
“An affordable electric car starts with an affordable battery,” Farley said in the statement.
Another battery joint venture, with SK Innovation in Kentucky, will begin manufacturing cells for the E-Transit van starting in mid-2025 and batteries for Ford’s new electric commercial truck in Tennessee in late 2025.
The automaker said production of lithium iron phosphate (LFP) batteries is scheduled to begin in 2026 at its Michigan battery park and will be eligible for IRA benefits.
Ford has licensed China’s CATL to use LFP battery technology, a deal that has been heavily criticized by some lawmakers. A Ford spokeswoman said the terms of the agreement have not changed.
Ford said it will provide an update on electrification, technology, profitability and capital requirements in the first half of 2025.
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