Announcing a change to its electric vehicle strategy, Ford said Wednesday it is canceling its plans for an all-electric three-row SUV and pushing back the launch of a full-size EV pickup.
"Our focus here is to remake Ford into a higher-growth, higher-margin, more capital-efficient and durable business, and that means these vehicles need to be profitable," John Lawler, Ford vice chair and chief financial officer, told media outlets on a call Wednesday morning. "And if they're not profitable, based on where the customer is in the market is, we will pivot and adjust and make those tough decisions."
Instead, the company is prioritizing an all-electric commercial van in 2026, followed by two new electric pickups in 2027, the Detroit Free Press reports.
Lawler said Ford determined that the three-row electric SUV wouldn't be profitable within the first 12 months of its launch. So instead, the company will make a hybrid three-row SUV, based on findings that customers who would drive three-row SUVs are using them for long-range travel with their families and want more electrification choices.
This pivot will cost Ford. Lawler said Ford will take a special non-cash charge of about $400 million for the write-down of certain product-specific manufacturing assets. These actions may also result in additional expenses and cash expenditures of up to $1.5 billion. [...]
Longer-term, by taking these actions, Lawler said Ford's mix of annual capital expenditures on pure EVs will decline to about 30%, down from about 40%.
Lawler said Ford will continue to sell its current lineup of EVs, which includes the F-150 Lightning pickup, the Mustang Mach-E SUV and commercial vans.
These are vehicles Ford had good initial success with, Sam Abuelsamid, principal analyst for transportation and mobility at Guidehouse Insights in Detroit, but as the automaker has been working on its next generation of EVs, "they have had a hard time it seems ... getting those products to the point where they were ready for production."
Factors like pricing pressure, the politicization of EVs and problems with charging infrastructure, along with what Abuelsamid believes were technical issues for Ford with developing the new software platform and electronics architecture, led the automaker to say " 'We're not ready. We don't have cost-competitive vehicles to offer,' and so they've decided to pivot."
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The strategy shift comes after Ford lost $2.46 billion on EVs in the first half of the year, according to AP.
Another nail in the coffin of Biden/Harris EV mandates. https://t.co/GPQorOQQUr
— David Asman (@DavidAsmanfox) August 21, 2024
What a surprise, the government's effort to force people into EVs is a failure. Hybrids always made more sense but the eco-extremists continue to hate anything with an internal combustion engine. https://t.co/ZuRPfBX5kR
— Jeff Wagner (@jeffwagnerradio) August 21, 2024
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