Ford Motor Company has announced a series of adjustments to its electric vehicle (EV) strategy, following reports that the automaker is losing $100,000 on every EV sold. In response to these financial challenges, the company is scaling back its electric vehicle plans.
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Originally slated to begin new EV production this year at its $5.6 billion manufacturing plant in Tennessee, Ford’s timeline for when this facility will start producing electric vehicles has now been pushed back to 2027.
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The automaker is also reducing its planned spending on EVs from 40% to 30% of its budget. This reduction includes canceling the development of a three-row electric SUV and delaying the launch of a next-generation all-electric pickup truck.
As a part of this shift, Ford is increasing its focus on hybrid vehicles, which combine traditional internal combustion engines with electric power. This pivot is expected to cost the company up to $1.5 billion, which comes amid slower than expected adoption of EVs throughout the U.S. this year.
Despite Ford’s shift, industry opinions remain divided. Some experts view the recent downturn in EV sales as a temporary setback. Executives from competitors like General Motors and Lucid Motors argue that hybrids are only a short-term solution and that fully electric vehicles represent the future of the industry.
However, Ford’s leadership emphasizes that their decision to pivot toward hybrids is driven by customer demand.
Jack Aylmer
JUST A FEW MONTHS AFTER IT WAS REPORTED THAT FORD IS LOSING 100,000 DOLLARS ON EVERY ELECTRIC VEHICLE IT SOLD-
THE AUTOMAKER IS ANNOUNCING PLANS TO PUMP THE BRAKES ON FURTHER EV EFFORTS.
FORD WAS EXPECTED TO START PRODUCING ELECTRIC VEHICLES AT ITS NEW 5.6 BILLION DOLLAR TENNESSEE PLANT THIS YEAR.
BUT NOW THAT TIMELINE IS GETTING PUSHED BACK UNTIL 20-27,
THE COMPANY SAYS IT WILL SLASH ITS SPENDING ON EVS FROM 40 PERCENT DOWN TO 30 PERCENT-
CANCELING PLANS TO MAKE A THREE-ROW ELECTRIC SUV AND DELAYING THE LAUNCH OF AN ALL-ELECTRIC PICKUP TRUCK MODEL IN THE PROCESS.
INSTEAD, FORD IS INDICATING A SHIFT IN STRATEGY TOWARD PRODUCING MORE HYBRID VEHICLES-
THESE CHANGES ARE EXPECTED TO COME AT A COST OF UP TO ONE-AND-A-HALF BILLION DOLLARS.
HOWEVER, OTHERS IN THE AUTO INDUSTRY SAY THE RECENT DROP SEEN IN EV SALES IS NOTHING MORE THAN A SPEEDBUMP-
AND THAT HYBRIDS WILL ULTIMATELY BE A DEAD END.
GM’S CEO HAS CALLED HYBRIDS A SHORT TERM SOLUTION-
A SENTIMENT SHARED BY THE CEO OF EV-MAKER LUCID, WHO BELIEVES THESE TYPES OF CARS DON’T STACK UP TO ELECTRIC MODELS.
STILL, FORD’S LEADERSHIP IS PUSHING AHEAD WITH A PIVOT TO HYBRIDS-
SAYING THE CHANGE IS INFLUENCED BY LISTENING TO WHAT THEIR CUSTOMERS WANT.
FOR MORE STORIES ABOUT THE ELECTRIC VEHICLE TRANSITION, DOWNLOAD THE STRAIGHT ARROW NEWS APP AND SIGN UP FOR ALERTS FROM ME – JACK AYMER.
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