Ford Motor is shifting the focus of its electric vehicle ambitions. The Michigan-based company has decided to focus on lower-cost models with a different make and reduced its EV investment to reflect the shift.
The company announced plans to make two new electric pickup trucks and a new commercial van. All three models will cost less and have longer range than previously planned, Ford said. They are expected to support the bottom line quickly: Ford said the models would be profitable before taxes within a year of their launch.
The company also said it would cut capital spending on EVs to 30 percent of its annual capital budget from 40 percent at present.
Ford also scrapped plans to build a fully electric, three-row SUV, citing the vehicle's battery costs. Instead, it will now consider the planned model for production as a gas-electric hybrid.
Ford's decisions come amid touch competition from other automakers. The company is losing billions on its current EV lineup, with this year's first-half loss from EVs totaling $2.46 billion.
In a release, the company noted that the global EV market was changing rapidly, and that the company needed to compete with Chinese automakers that have lower production and engineering costs, helping them better bridge the high prices that keep most EV buyers away.
Chinese EV makers, who have dominated the market for cheaper EVs, are now beginning to move upmarket. BYD, for example, has begun production of a supercar that will rival Ferrari. In response, American and European carmakers are seeking affordability. Volkswagen has announced plans to launch a €20,000 EV.
Meanwhile, Ford said production of its next-generation full-size electric pickup truck --- to be manufactured in Tennessee --- would be delayed by 18 months. The company will also launch a new, mid-sized electric pickup, based on new underpinnings developed by a team in California. Both vehicles will go on sale in 2027.
In 2026, the company will begin production of a new commercial van at its assembly line west of Cleveland.
The new strategy will require a $400 million write down, and the company expects to incur an additional $1.5 billion in expenses as part of the new plan. John Lawler, Chief Financial Officer of Ford, said in a statement: "We're committed to creating long-term value by building a competitive and profitable business."
EV sales have slowed in the US, but experts say the dip is temporary. BloombergNEF forecasts EVs will account for 48 percent of new passenger vehicle sales by 2030.
The country is also forecast to have more public EV charging stations than fuel stations by 2032, according to a Bloomberg forecast based on data from the US Department of Energy and assuming the continuation of the current pace of EV station additions.
The US, which has roughly 9,000 public fast-charging stations, recently added 704 more in just three months.