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The car company says it isn’t backing off its next-gen EVs, but it is pausing some big factory projects, including a plant in Kentucky.
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Ford is postponing $12 billion in EV factory building, including a planned battery factory in Kentucky. The reasons given were an unwillingness by customers to pay extra for its electric vehicles. You see, they’re too expensive, and now Ford’s massive transformation into an EV company is now going to take a lot longer than before.
Ford’s EV business continues to lose money, around $1.3 billion this past quarter in adjusted earnings. So far this year, Ford has lost $3.1 billion on its EV spending and has said it’s going to lose a total of $4 billion for the year.
The Kentucky plant, a “mega campus” that builds lithium ion batteries for electric cars, will be put on hold. But its Blue Oval City project in Tennessee was still moving forward.
Ford’s not alone in all this, of course. General Motors is pushing back production of its new slate of electric trucks and SUVs. Tesla CEO Elon Musk spent a large chuck of his last earnings call moaning about interest rates. It’s rough out there right now.
Customers would probably agree. Most of the early adopters have, well, adopted, and the next tier of possible customers has enough sticker shock to keep their wallets closed. Ford has tried to address this with new releases like the F-150 Lightning Flash, a mid-priced trim of its electric truck. The company says that the customers will decide how many EVs it makes — and right now, that means tapping the brakes on big projects.
It’s not all bad news. Ford reached a tentative agreement with the United Auto Workers last night, being the first of the Big Three US automakers to get a deal. Sure, the strike cost it around $1.3 billion, and the company pulled its guidance for 2023 — meaning its not confident it can hit the targets it laid out earlier in the year.