Ford ditches new EV in major strategy shift amid slowing demand for electric cars
Ford has abruptly canceled plans to produce a three-row electric SUV and postponed construction of a new EV factory in Tennessee.
The withdrawal marks a major change for the car company as demand for electric cars wanes.
Scrapping the electric SUV and canceling plans for a new factory could cost the automaker as much as $1.9 billion.
The manufacturer is also reducing spending on electric cars from 40 percent to 30 percent of the annual investment.
Ford will now focus on developing hybrid and more affordable models, the company announced on Wednesday.
Ford has bet big on electric vehicles, but expects to lose $5.5 billion this year
The Tennessee factory, still under construction and now delayed, is set to produce the next generation of full-size electric pickup trucks.
Ford expects to lose $5.5 billion this year alone from its EV division.
“This is a huge change for us, and we’re not going to make that change without first doing a thorough investigation to convince ourselves that this is the right plan,” CEO Jim Farley said of the change.
“I have every confidence,” he added.
Ford said the shift in EV strategy, including rethinking battery sourcing, is partly due to the need to compete with cheaper Chinese options.
“An affordable electric vehicle starts with an affordable battery,” Farley said. “If you’re not competitive on battery cost, you’re not competitive.”
Despite the downturn, Ford’s electric vehicle business continues to grow. The Ford F-150 Lightning is the best-selling electric truck in the country.
Yet Americans are increasingly put off by the cost of electric cars, worried about battery range, and increasingly interested in hybrid models.
By focusing more on hybrids, longer-range vehicles and affordable cars, Ford aims to address these concerns and meet customers where they are.
“As the second-largest electric vehicle brand in the U.S., we’ve learned a lot about what customers want and value, and what it takes to combine the best in the world with cost-effective design. We’ve developed a plan that gives our customers maximum choice and plays to our strengths,” Farley said.