Ford pivots from electric vehicles

Ford Motor Co is pivoting away from its once ambitious electric vehicle (EV) plans amid financial losses and waning consumer demand for the vehicles, in favour of investment in more efficient gas engines and hybrid EVs, the company said on Monday.

The Detroit automaker, which has poured billions of dollars into electrification along with most of its industry peers, said it will no longer make the F150 Lightning electric pickup truck, instead opting for an extended range version of the vehicle.

Ford will also introduce some manufacturing changes; its Tennessee Electric Vehicle Centre – part of the BlueOval City campus and once the future of Ford’s EVs and batteries – is being renamed the Tennessee Truck Plant and will produce new affordable petrol powered trucks instead. Ford’s Ohio Assembly Plant will produce a new petrol and hybrid van.

The company has lost US$13 billion on EVs since 2023 and said it expects to take a US$19.5 billion hit largely in the fourth quarter due to the EV business.

“This is a customer driven shift to create a stronger, more resilient and more profitable Ford,” CEO Jim Farley said in a statement. “The operating reality has changed, and we are redeploying capital into higher return growth opportunities: Ford Pro, our market leading trucks and vans, hybrids and high margin opportunities like our new battery energy storage business.”

Ford said it now expects half of its global volume will be hybrids, extended range EVs – which also incorporate a petrol engine – and full EVs by 2030, up from 17 per cent this year.

“Ford’s elimination of the electric F 150 Lightning is not much of a surprise after the truck failed to come close to filling the plant’s capacity. Ford’s choice to convert an existing petrol powered truck to accept the electric drivetrain helped reduce their upfront costs which, in hindsight, was the right move,” Sam Fiorani, vice-president at AutoForecast Solutions, told The Associated Press.

“For months, the future of BlueOval City has been in question and this announcement locks in the direction of this large plant,” Fiorani added. “Adding an affordable vehicle to the Ford line up fills a glaring gap in the market.”

Several other automakers have made changes to their electrified product plans in recent years as consumer demand for EVs in the United States has not quite met expectations.

EVs accounted for about 8 per cent of new vehicle sales in the United States last year, but factors such as cost and charging infrastructure remain concerns for mainstream buyers.

The average transaction price for a new EV last month was US$58,638, compared with US$49,814 for a new vehicle overall, according to auto buying resource Kelley Blue Book.

Meanwhile, while public charging availability has improved, the industry has relied on home charging as a selling point for prospective buyers, and not everyone has access to charging at home.

Since taking office for a second time, President Donald Trump has drastically shifted United States policy away from EVs, calling EV friendly policy set under former President Joe Biden a “mandate.”

Though Biden era policies – including generous tax incentives for consumers, and tailpipe and fuel economy rules for automakers – encouraged EV adoption, no policies required the industry to sell or Americans to buy EVs. Biden targeted half of new vehicle sales in the United States to be electric by 2030.

The Trump administration has since slashed that target, eliminated EV tax credits and proposed weakening the emissions and fuel efficiency rules.

“The one two punch of the public’s slow EV adoption and the Trump administration’s softer stance on fuel economy and emissions has encouraged every automaker to re think their current direction,” Fiorani added. “Electric vehicles are still the future, but the transition to EVs was always going to take longer than automakers have been promising the public.”

AP