Changes to the Ford EV strategy have been announced, including the cancellation of a three-row electric SUV and the delay of a future full-size electric pickup by 18 months. This shift reflects a reduction in spending on fully battery-powered vehicles.
Ford EV strategy changes
On August 21, Ford announced that these changes could result in up to $1.9 billion in costs, including a $400 million noncash charge related to the cancellation of the crossovers, which were previously scheduled for release after 2025. This is in addition to the $2.5 billion the company said it has lost so far in 2024 on its EV business.
Instead of the previously planned electric crossovers, Ford will develop a range of hybrid three-row crossovers. Details regarding the timing and location of their production have not been provided. CFO John Lawler indicated that the new vehicles will offer various propulsion options but did not specify further.
Lawler explained that the decision was influenced by evolving market conditions, competition, and customer needs, as well as considerations related to battery size and cost. He noted that the company could not produce a profitable vehicle within the first year of launch given these factors.
The crossovers were originally planned for Ford’s Oakville Assembly Plant in Canada, but production there will now focus on Super Duty pickups, leaving the EVs without a designated manufacturing site.
Ford has also adjusted its capital expenditure allocation for electric vehicles, reducing it to approximately 30 percent from the previously planned 40 percent. The launch of the next-generation full-size electric pickup, codenamed “T3,” is now scheduled for late 2027 to leverage lower-cost battery technology and other cost efficiencies.
Despite these delays, Ford’s battery plant at Blue Oval City in Tennessee is still on track to start cell production in 2025. The company’s near-term focus will be on developing smaller, more affordable EVs, with the first vehicle on a new platform, a midsize pickup, expected in 2027. Additionally, Ford plans to introduce a next-generation commercial van at Ohio Assembly in 2026.
Further details on Ford’s electrification strategy are expected to be shared at an event in the first half of 2025. Lawler expressed confidence in the company’s product lineup, stating that it remains competitive and well-positioned for the evolving EV market.
The bottom line
The EV business continues to be tough for all automakers and Ford, like GM and others, is responding to the market conditions. Will consumers flock to EVs and make Ford’s investments pan out? That remains a billion dollar question.
