- Ford is reducing the production of substantial electric Sport Utility Vehicles
Ford acknowledges the struggles in the electric vehicle market and decides against creating a battery-powered SUV with three rows, causing them to lose up to $1.9 billion (€1.7 billion). Originally planned for 2025, the release was pushed back to 2027.
The electric vehicle segment is currently experiencing quarterly losses for Ford, while their gasoline engines and commercial vehicles are financially robust. There's been an increased interest in automobiles equipped with hybrid powertrains recently.
As a result, Ford is reevaluating its expenditure on electric vehicles, reducing it from 40% to 30% of their annual budget. The release date for the successor model of the large electric pickup F-150 Lightning will now be 2027 instead of 2025. Meanwhile, Ford aims to reduce battery costs.
Profitable electric vans take precedence
All new models now have to turn a profit within the first year, according to CFO John Lawler. Priority has been given to an electric van set for production in 2026 and a medium-sized pickup scheduled for 2027.
The surge in electric vehicle sales during the COVID-19 pandemic encouraged major automakers to invest heavily in their electric vehicle divisions. However, demand has since significantly decreased, affecting even market leader Tesla. Ford's competitor General Motors has also stopped its electric vehicle expansion plans.
Ford CEO Jim Farley mentioned he was content with the large electric SUV but couldn't guarantee profitability. Meanwhile, Tesla's competitor Lucid remains committed to their plan for such a vehicle, with first customers expected to receive the Lucid Gravity SUV by the end of this year, as stated by CEO Peter Rawlinson in technology blog "The Verge". Rawlinson believed the electric vehicle market slump was only temporary and criticized the focus on hybrid powertrains as a "dead end". Lucid experiences high losses with their first model, being financially backed by billions in investments from Saudi Arabia.
Despite Ford's decision to postpone the manufacturing of a battery-powered SUV, the demand for electric vehicles with hybrid powertrains is growing. To capitalize on this, Ford is focusing on profitable electric van and pickup models, such as the upcoming electric van in 2026 and the medium-sized pickup in 2027.
While Ford has faced challenges in the electric vehicle market, other major automakers like General Motors have also adjusted their plans, indicating a shift in focus towards profitable electric models.
