In the early hours of this morning, Ford announced a shift in its electric vehicle strategy amid sluggish sales and massive financial losses. The first electric vehicle on its upcoming new electric vehicle platform will be a midsize truck, not a compact truck or crossover. The Canadian-made three-row electric SUV, originally slated to launch this year, is now dead despite the brand investing $400 million in its development. The replacement for the Ford F-150 Lightning, which was originally slated for 2025, won’t arrive until 2027.
Ford has cut spending on electric vehicles by 10% and implemented a new policy that states that if an electric vehicle is not profitable in the first 12 months of its sale, the project will not move forward.
Other than that, everything is… fine?
But electric-vehicle enthusiasts, and even some analysts, are confused about the moves. Ford has no plans to cancel the Mach-E or Lightning, but with the exception of a new E-Transit van in 2026, it won’t introduce another electric vehicle until 2027. Meanwhile, the company has gaps in its electric-vehicle lineup. Cory Cantor, an electric-vehicle analyst at BloombergNEF, thinks this is the worst time to back away from electric vehicles.
Ford’s new plan leaves the automaker vulnerable, Cantor said. “Recalibrating its strategy could leave it vulnerable if other automakers prove they’ve read the EV landscape better,” Cantor wrote in a blog post on BloombergNEF.
Inside electric cars
Imaginary design of Ford’s compact electric truck
Ford’s revamp of its EV strategy didn’t happen in a vacuum. Despite continued growth in EV market share, Ford has been backtracking on its EV promises over the past 18 months amid heavy losses and a weaker-than-expected EV market. In 2023, Ford is lowering its production targets for the F-150 Lightning pickup truck.
Soon after, the company backed away from its plan to sell Model E cars, with dealers having to opt in and pay to sell Ford electric vehicles. It also cut spending on two battery factories, including its joint venture with Chinese battery giant CATL. Ford has historically had a habit of backtracking on its electric-vehicle goals.
That’s not good. “Ford’s retreat could reverberate across the longer-term outlook for electric vehicle adoption in North America, but it could also open the door for competitors” to do the same, Cantor wrote.
Ford needs to improve its profitability and ideally expand with new, easier-to-manufacture products. Cutting back on investments now—even if it looks good for quarterly earnings—rather than doing its best to maintain its momentum could be a huge mistake.
And yes, Ford has momentum. Mustang Mach-E sales are up. Ford is the second-largest electric vehicle maker in the United States.
But for how long? Hyundai and Kia’s share of the EV market continues to grow. Its Georgia plant, which the two companies share, will start operating soon. The company plans to launch at least three more models before 2027, including the three-row Hyundai Ioniq 9 and the budget Kia EV3 and EV4.
GM has also reconsidered its EV strategy, but it still has plans to introduce a new version of the Bolt EV to cater to budget buyers. The company also has plans to launch more models, and it seems to believe it can make larger EV batteries profitable, too.
Ford won’t have anything until 2027.
Europe has the Capri and Explorer EV, but they’re not planned for the U.S. They’re also just redesigned VW products that don’t fit neatly into Ford’s development cycles, except to serve as a stopgap until Ford figures out what to do in Europe.
As Cantor points out, the US presidential election could have some major impacts here.
A Donald Trump win would certainly lead to a relaxation of fuel economy standards and Ford wouldn’t need to invest as much in electric vehicles. But a Kamala Harris win would likely keep current standards in place (or even tighten them). That means Ford could be further behind, especially as foreign and domestic brands continue to push ahead with their electric vehicle plans.
Honda and Toyota are finally getting serious about electric cars, and of course there’s the existential threat posed by Chinese brands like BYD and Zekr that sell virtually everywhere else in the world except the US.
“We see the Chinese as the main competitor, not GM or Toyota,” Farley said last year. “To beat them, you either have to have a very distinctive brand — which we think we have, based on our symbols — or you have to beat them on cost. But how do you beat them on cost if they are five times your size?”
That’s still a great question, and one that hasn’t been answered yet in 2024. But with EV plans pushed back to later, we have to wonder if Ford will finally be able to get an answer in 2027.
Contact the author: kevin.williams@insideevs.com
