Ford Slows EV Push, Cuts Investment Amid Billion-Dollar Losses and Market Shift

In a significant shift in strategy, Ford Motor Company has announced a slowdown in its ambitious electric vehicle (EV) program, revealing plans to invest less in battery-powered cars. This decision comes as the automaker grapples with multibillion-dollar losses within its EV division, prompting a reevaluation of its targets and investments in the evolving automotive landscape. During a recent conference call, Ford's chief financial officer, John Lawler, outlined the company's new approach, indicating that investments in electric vehicles will now comprise approximately 30 percent of Ford’s capital budget, a reduction from the previously planned 40 percent. This pivot reflects the changing competitive dynamics in the global market for electric vehicles, with Lawler emphasizing the necessity for these models to be profitable. “If not, we will pivot and adjust and make those tough decisions,” he stated, underscoring the challenges faced by traditional automakers in the face of rising production costs and fluctuating demand. Among the most notable changes is the decision to delay the introduction of a new large electric pickup truck by about 18 months, pushing its launch to 2027. Additionally, Ford has scrapped plans for a three-row electric sport-utility vehicle, reflecting a broader reassessment of its product lineup in light of current sales trends. While the company remains committed to bringing new electric products to market, including an electric delivery van slated for 2026 and a medium-sized electric pickup also expected in 2027, the alterations signal a cautious approach moving forward. These developments come at a time when the growth rate of electric vehicle sales has significantly slowed in both the United States and Europe. Consequently, several automakers, including Tesla, have implemented price cuts to stimulate demand. Ford's own EV division reported a substantial loss of $2.5 billion in the first half of this year, a stark contrast to the company’s overall profit of $3.2 billion during the same period. A few years prior, Ford was optimistic about its potential to produce up to two million electric vehicles annually by 2026, a target that has since been abandoned. Currently, the company offers three electric models in the U.S. market: the F-150 Lightning pickup, the Mustang Mach-E SUV, and the Transit van. The company continues to invest in its manufacturing capabilities, with three battery plants under construction in Kentucky, Tennessee, and Michigan. However, Ford recently announced the suspension of a fourth plant that was proposed for Kentucky. The Tennessee facility is set to supply battery packs for the new electric delivery van, which will be assembled in Ohio, as well as for the delayed large electric pickup truck. As Ford recalibrates its electric vehicle strategy in response to market realities, the automotive giant faces the pressing challenge of navigating an increasingly competitive and cost-sensitive environment. The decisions made in response to these obstacles will not only shape Ford’s future but will also have broader implications for the entire industry as it adapts to the evolving landscape of electric mobility.