OAN Staff James Meyers
8:17 AM – Thursday, August 22, 2024
Automaker Ford announced that it is recalibrating its EV strategy over concerns of not making enough profits, including getting rid of an electric SUV.
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The company announced Wednesday that it is adjusting its roadmap for North American vehicles to include a broader range of electrification options, including lower prices and longer ranges.
Ford announced it is canceling plans to manufacture a large, three-row electric SUV.
Ford chief executive officer Jim Farley said, “We loved our three-row crossover and I was so excited to show everyone the work we did. But there was just no way it would ever meet our criteria of being profitable.”
Additionally, Ford ditched plans for its next lineup of all-electric SUVs, replacing them with hybrid models, which typically offers shorter battery range but longer overall range when combined with a gasoline engine.
The plan alone will cost the automaker almost $400 million because it needs to write down the manufacturing equipment it had put in place to build the EV SUVs it doesn’t plan on building anymore. Ford said the change in plans could cost an estimated $1.5 billion.
According to a report by Bloomberg, Ford’s EV division is on pace to lose as much as $5.5 billion this year.
The outlet also reported in May that Ford was losing $100,000 for every electric car it delivered in the first quarter of 2024.
To combat the losses the company said it would improve its battery sourcing and increase manufacturing efficiency to save on money. Only 30% of Ford’s annual capital expenditures will be dedicated to pure electric vehicles in the future, down from 40%.
Meanwhile, Ford trails Tesla in EV production in the U.S., but Ford’s F-150 Lightning model is the best-selling truck in America right now.
“We learned a lot as the No. 2 U.S. electric vehicle brand about what customers want and value, and what it takes to match the best in the world with cost-efficient design, and we have built a plan that gives our customers maximum choice and plays to our strengths,” Farley said in a statement.
Ford’s newest vehicle into the EV lineup will be an electric commercial van built in Ohio in 2026. This new vehicle could possibly help compete with Rivian, which has a deal with Amazon that has made its electric vans available across America.
After the van, Ford will begin making a “groundbreaking,” electric truck, which it has dubbed “Project T3.” The new truck will be introduced halfway through 2027, which will feature bi-directional charging (it can charge your home in a blackout) and improved aerodynamics.
“An affordable electric vehicle starts with an affordable battery,” Farley said. “If you are not competitive on battery cost, you are not competitive.”
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