Ford
Ford changed its electric-vehicle strategy again, canceling long-held plans for electric three-row SUVs and delaying production of its next electric pickup truck.
In a strategy shift that Ford says will initially cost the company nearly $2 billion, the American automaker is replacing the canceled electric SUVs with hybrid models, its chief financial officer, John Lawler, told reporters on a Wednesday-morning call.
Lawler said that after assessing pricing pressure on EVs and the cost of a battery large enough to power three-row SUVs, as well as taking into account consumer demand, Ford found that it wouldn't be able to meet its goal of achieving profitability for the electric SUVs within the first year of launch.
"These vehicles need to be profitable," Lawler said. "If they're not profitable based on where the customer is — where the market is — we will pivot and adjust."
Ford is also reducing spending on EVs to 30% of capital expenditures from 40% previously.
In addition to the canceled EVs, Ford is pushing back production of its next full-size electric pickup truck to late 2027. Output of that vehicle was planned to start next year at Ford's new EV assembly complex in Tennessee.
Lawler said the delay would allow Ford to spend more time reducing battery costs, making the future truck more affordable.
Lawler said this new family of hybrid SUVs would include propulsion options but didn't specify whether that would include a plug-in hybrid option or say when these cars would go on sale.
Ford's stock price was up 1% Wednesday morning following the news.
Ford's revised EV strategy is just the latest in a series of shifts from car companies this year as they adjust to a more practical and frugal group of EV shoppers.
A slew of high-end EVs have hit dealer lots after years of development. Meanwhile, the wealthy early adopters these cars were designed for are dropping out of the market.
That has led to a mismatch of supply and demand for EVs that car companies are scrambling to remedy.
In addressing the affordability issue with EVs, Ford's new strategy announced this week also includes another electric pickup truck coming in 2027 that will be engineered on a more affordable platform.
Ford has leaned heavily on its hybrid offerings as demand for those vehicles has increased. Hybrids appeal more to shoppers who are looking for a practical replacement for their gas-powered car, not just an extra car for the driveway.
"It's coming back to understanding the customer," Lawler said. "The goal here is to be nimble and to pivot."
Correction: August 21, 2024 — An earlier version of this story misstated the date of Ford's call with reporters. It was Wednesday, not Tuesday.
