CNN recently reported on Ford’s shift in strategy regarding electric vehicles in the American market. The automaker acknowledged that the current landscape is not what they initially anticipated, with customers showing a preference for affordability and range anxiety. As a result, Ford is making significant changes to its EV plans, focusing more on hybrids and lower prices.
In a recent announcement, Ford revealed that it is adjusting its roadmap for North American vehicles to include a wider range of electrification options. This includes offering lower prices and longer ranges to cater to the evolving needs of consumers. The company has decided to scrap its plans for an all-electric SUV lineup and replace them with hybrid models. While hybrids may offer shorter battery range, they provide longer overall range when combined with a gasoline engine.
This shift in strategy will come at a cost for Ford, with at least $400 million being spent on writing down manufacturing equipment that was originally intended for building EV SUVs. The company estimates that the change in plans could ultimately cost them upwards of $1.5 billion. However, Ford is also focusing on improving battery sourcing and increasing manufacturing efficiency to save on costs. They plan to allocate just 30% of their annual capital expenditures to pure electric vehicles in the future, down from 40%.
Despite trailing behind Tesla in EV production in America, Ford’s EV business is growing. The Ford F-150 Lightning has become the best-selling electric truck in the United States. However, with the increasing popularity of vehicles with hybrid technology, Ford has decided to pivot towards meeting the current demands of customers.
Ford CEO Jim Farley emphasized the importance of understanding customer preferences and values in shaping their EV strategy. He stated, “We have built a plan that gives our customers maximum choice and plays to our strengths.” While Ford will continue to produce EVs, they will do so at a slower pace. Their next entry into the EV lineup will be an electric commercial van set to launch in 2026, aiming to compete with Rivian’s electric vans.
Looking ahead, Ford is developing a groundbreaking electric truck under the codename „Project T3.“ This truck, set to debut in the second half of 2027, will feature bi-directional charging and improved aerodynamics. Despite the delayed timeline, Ford believes that advancements in battery manufacturing will help lower the cost of the truck by the time of its release.
Farley emphasized the importance of affordable batteries in making electric vehicles accessible to a wider audience. He stated, “An affordable electric vehicle starts with an affordable battery. If you are not competitive on battery cost, you are not competitive.” Ford’s strategic shift towards hybrids and affordability reflects their commitment to meeting the evolving needs of the American electric vehicle market.