After billions in losses in the first half of the year, the US car manufacturer is making changes ford its electric vehicle strategy. CEO Jim Farley (62) now wants to concentrate on the production of two new electric pickups and a new van instead of large electric SUVs. According to the company, the vehicles will cost less, have a longer range and will be profitable before taxes just one year after their launch.
For the US company, this amounts to a reset of the previous car plan. Farley had previously brought large electric SUVs onto the market with a lot of marketing effort – especially the F-150 Lightning, the electric version of the best-selling car for decades USA. But economically the offensive had become a disaster. Ford lost a lot of money with every model. In the first half of 2024, this totaled $2.46 billion, which reduced profits from classic gasoline engines and commercial vehicles. Ford expects to lose up to $5.5 billion on its electric vehicles this year alone.
Farley is now adapting the model strategy and is increasingly relying on hybrid drives rather than fully electric ones. Large SUVs with three rows of seats will no longer be purely electric in the future because the battery costs are too high and the range is too short. Hybrids, the company said, would have similar profitability to gasoline-powered vehicles, which Ford will continue to build. Overall, investments in electric vehicles will be cut: instead of 40, only 30 percent of the annual budget will be used for their development in the future.
The successor to the F-150 Lightning, developed under the project name T3 and recently postponed, is further delayed. It is now scheduled to come onto the market in the second half of 2027. Before that, the company wants to bring an unspecified van onto the market by 2026, which will be produced in an assembly plant west of Cleveland. The two new pickup models are scheduled to come onto the market in 2027. They are based in part on a platform developed by a small team in California. “These electric vehicles will be more cost-effective,” Farley explained.
$400 million in write-offs
The decision to stop building all-electric large SUVs forces Ford to write off $400 million. The company also expects additional costs of up to $1.5 billion. “We are committed to creating long-term value by building a competitive and profitable business,” Chief Financial Officer John Lawler said in a statement.
Explaining the pivot, the company said the global electric car market was changing rapidly and that it needed to evolve to compete with Chinese automakers, which have lower production and development costs. At the same time, current buyers are more cost-conscious than early adopters, and competition is increasing. “This dynamic underscores the need for a globally competitive cost structure while selecting customer and product segments to ensure profitable growth and capital efficiency,” the company said.
Electric vehicle sales in the U.S., Ford’s most profitable market, are still growing but have slowed. The prices that can be achieved have also fallen. Among other things, market leader Tesla aggressively reduced prices and forced others to follow suit.
Overall, U.S. electric vehicle sales rose a total of 7 percent to 599,134 vehicles in the first half of the year, Motorintelligence.com reports. Their share of the US new car market was 7.6 percent – about the same level as for the whole of last year. Sales of hybrid vehicles rose 35.3 percent to 715,768 vehicles from January to June, surpassing sales of electric vehicles.