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Ford Motor Co. announced significant changes to its electric vehicle (EV) strategy on Wednesday, August 21, revealing plans to cancel a three-row electric SUV and delay the launch of a new electric version of the F-150 pickup truck. The decision comes as the company aims to cut costs and boost demand amidst a challenging period for the automaker.
The automaker's revised strategy includes a greater emphasis on hybrid vehicles, those combining electric motors with gasoline engines, as opposed to fully electric models.
Ford Recalibrates EV Strategy
The shift is in response to high battery costs and slower-than-expected sales of electric vehicles. Ford decided to write down $400 million related to the canceled SUV and potentially incur additional expenses of up to $1.5 billion, reflecting the company's financial adjustments.
According to Reuters, Ford is focusing its resources on producing a new electric mid-sized pickup and a commercial van, with these vehicles slated to enter the market in the coming years. The company has also announced a significant reduction in annual capital spending on fully electric vehicles, dropping from 40% to around 30%.
As part of this shift, Ford will continue investing in its hybrid lineup, which has seen increased consumer interest as a more affordable alternative to fully electric vehicles. The company's hybrid offers aim to bridge the gap between traditional gas-powered cars and electric vehicles, catering to growing consumer demand.
Ford CEO Jim Farley emphasized the importance of reducing production costs and highlighted the company's ongoing efforts to develop innovative, cost-effective electric vehicle technology.
Despite the postponement of the F-150 Lightning's successor to 2027, Farley remains confident in Ford's strategy and the team's progress in California, where new electric vehicle architecture is being developed.
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Battery Investments Expansion
In addition to changes in EV production, Ford is making significant investments in battery technology. The company plans to relocate some of its battery production from Poland to Holland, Michigan, and has entered into a new joint venture with SK Innovation in Kentucky.
This venture will support the production of batteries for the E-Transit van and future electric commercial vehicles. Ford is also set to start producing lithium iron phosphate (LFP) batteries in Michigan by 2026, aiming to meet US incentives requirements.
The BlueOval SK joint venture, which is establishing battery plants in Kentucky, faces delays in equipment and hiring but has secured an extended deadline until 2030 to meet job creation goals. The first battery plant is set to open in 2025, with plans for significant cost improvements, WDRB reported.
Ford's strategic adjustments also include exploring new locations for manufacturing plants, with Shelby County being considered as a potential site for a $400 million investment that could create around 260 jobs.
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