Yahoo Autos Ford's Huge Shift in EV Strategy: No to 3-Row SUV, Yes to Small Pickup
The electric vehicle market remains a costly challenge for automakers in the United States. Many car companies have implanted massive, incredibly expensive plans to prioritize EV production over the next few years, yet customers haven't come along for the ride yet. So, automakers are being forced to shift their plans — and the latest to do so is the Ford Motor Company.
On August 21, Ford announced a major rework of its future EV plans, starting with the cancellation of its future all-electric three-row SUV. The automaker has also confirmed an 18-month delay to its upcoming "T3" electric pickup truck model, as part of Dearborn's move to reduce EV spending to just 30 percent of future capital expenditures.
Ford says that it plans to continue developing electric vehicles, but will adjust its strategy to better align with the brand’s expertise. (And, presumably, what buyers are buying.) The automaker further confirmed that it plans to begin production of a new commercial van at its Ohio facility by 2026, whereas a new electric truck built in Tennessee will arrive in 2027.
The new truck is said to be a midsize offering, which will be the first EV built on Ford’s new affordable electric vehicle platform that a California-based skunk works team has been developing since 2022. The flexible platform will allow Ford to produce a number of vehicles across various segments without incurring major reinvestment, similar to what General Motors has achieved with its Ultium platform.
Ford has also shared more details about its canceled EV SUV project. The next three-row sport-utility vehicle from the Blue Oval will now arrive as a hybrid vehicle, as Ford plans to leverage that technology to meet customer demands. (Ford makes note that these new hybrid SUVs will "extend the range of the vehicle on road trips relative to pure electric vehicles," which leads us to suspect they'll be plug-in hybrids.) Ford has also confirmed that the next generation Super Duty trucks will employ some form of hybridization in an effort to reduce global emissions.
The rework to the 3-row plans is going to be costly however, as FoMoCo says it'll be taking a special non-cash charge of around $400 million to write down the manufacturing assets it no longer needs. These new decisions could also result in additional cash expenditures of up to $1.5 billion, according to the automaker.
“We are committed to innovating in America, creating jobs and delivering incredible new electric and hybrid vehicles that make a real difference in CO2 reduction,” said Ford president and CEO Jim Farley. “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.”
Efforts are also underway to help reduce the overall cost of the batteries that find their way into Ford's EVs and hybrids. The automaker is realigning its battery sourcing system to reduce costs, as well as ensure that its vehicles can qualify for the maximum tax break under the Inflation Reduction Act's production and consumer credits.
Ford is a major player in the American car market, and this represents a gigantic change in its future plans. No matter whether this move helps Ford extract more profitability from its electric vehicles, we wouldn’t be shocked to see other automakers start to walk back on previous bold EV plans. Getting customers to buy your EVs is a different challenge entirely from developing and building them — and automakers can’t afford to go broke in the process.
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