The high cost of producing electric cars has been a major challenge for many automakers, including the US auto giant Ford. In a recent announcement, Ford revealed that they are delaying the development of some of their electric vehicles due to the uncompetitive selling prices in the market. This strategic decision includes canceling the production of a three-line electric SUV and postponing the launch of the latest electric version of their best-selling truck, the F-150.
According to a report by Reuters on August 22, Ford’s Chief Financial Officer, John Lawler, stated that the decision to delay the electric vehicle development was made in order to focus on reducing production costs. This move aligns with a similar trend seen in other car manufacturers, such as General Motors, who are also facing challenges in the electric vehicle market.
Instead of pushing forward with electric vehicle production, Ford has decided to concentrate on their strengths in pickup trucks and commercial vehicles. The company plans to produce medium-sized electric pickup trucks and new electric vans, which has been well-received by investors as seen in the 1.1 percent increase in Ford shares.
Ford CEO Jim Farley emphasized the importance of reducing production costs to compete with electric car manufacturers from China and Tesla. To achieve this, Ford has established a special team in California dedicated to developing technology for more affordable electric cars. The first vehicle to utilize this new technology is a medium-sized electric pickup truck set to launch in 2027.
In addition to focusing on electric vehicles, Ford also announced plans to prioritize the development of hybrid cars, particularly in the SUV segment. This strategy aims to attract consumers who seek vehicles with longer distances while still being affordable. Furthermore, Ford will be relocating some of their battery production to qualify for incentives under the US Inflation Reduction Act (IRA) and further reduce production costs.
Farley highlighted the significance of affordable batteries in the success of electric vehicles, stating, „Achieved electric vehicles start with affordable batteries.“ As part of their efforts to reduce costs, Ford will be moving a portion of their battery production, in collaboration with South Korean battery partner LG Energy Solution, from Poland to Holland, Michigan.
Overall, Ford’s decision to delay the development of some electric vehicles and focus on reducing production costs demonstrates their commitment to adapting to the challenges of the electric vehicle market. By prioritizing affordability and efficiency, Ford aims to strengthen their position in the industry and meet the evolving demands of consumers worldwide.