Ford Motor Company Adjusts Electric Vehicle Strategy Amidst Financial Losses

Ford Motor Adjusts Electric Vehicle Strategy

Ford Motor Company, which had previously aimed to outpace its competitors in the electric vehicle (EV) market, is now reassessing its investments and the rollout of new battery-powered models. In an announcement made on Wednesday, the automaker revealed plans to delay the launch of a new large electric pickup truck by approximately 18 months, pushing its debut to 2027. Additionally, Ford has decided to cancel the development of a planned three-row electric sport-utility vehicle.

In light of significant losses—amounting to billions of dollars—associated with its electric vehicle segment, the company is also scaling back its projected spending on EVs. However, Ford is introducing a new electric delivery van set to hit the market in 2026, along with a medium-sized electric pickup expected to arrive in 2027. “The competitive nature of the market is changing globally,” stated Ford’s Chief Financial Officer, John Lawler, during a recent conference call. “This means our vehicles must be profitable; if they’re not, we will need to pivot, adjust, and make the difficult decisions.”

Mr. Lawler indicated that investments in electric vehicles will now comprise about 30 percent of Ford’s capital budget, a reduction from the previous 40 percent. This shift in strategy comes as the growth rate of electric vehicle sales has decelerated significantly in both the United States and Europe, prompting major players like Tesla and others to implement price cuts.

In the previous month, Ford disclosed that its electric vehicle division incurred a loss of $2.5 billion in the first half of the year, excluding certain expenses. In contrast, the company as a whole reported a profit of $3.2 billion. Just a few years earlier, Ford had ambitious plans to achieve an annual production capacity of up to two million electric vehicles by 2026, a target it ultimately abandoned last year.

Currently, Ford sells three electric models in the United States: the F-150 Lightning pickup, the Mustang Mach-E SUV, and the Transit van. The automaker is also in the process of constructing three battery plants, located in Kentucky, Tennessee, and Michigan. However, the company has halted construction on a fourth plant that was initially planned for Kentucky.

Ford announced that its Tennessee plant will produce battery packs for the new electric delivery van, which will be assembled at a facility in Ohio starting in 2026. Additionally, this plant will supply batteries for the large electric pickup truck, which is still under development and will be manufactured at a new assembly facility currently being constructed adjacent to the Tennessee battery plant.