Ford is cutting orders from high-voltage battery suppliers to try and keep a lid on its electric vehicle business losses, according to Bloomberg quoting people familiar with the matter.
In the first quarter of this year, Ford lost over $100,000 for every EV it built, mostly because of significant MSRP cuts. That’s double compared to last year, as per one of the sources, and the company has forecast total losses of up to $5.5 billion for its electric vehicle unit in 2024. By comparison, that’s almost as much as the profit expected to be made by the company’s internal combustion vehicle division, Ford Blue.
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Ford scales back EVs as it waits for its big win
Ford is working on an all-new, entry-level electric vehicle that could be priced as low as $25,000. But until that happens, the blue oval-bearing automaker is scaling down its EV game as it tries to cut losses.
Ford’s partnerships with battery suppliers SK On, LG Energy Solution and CATL are still up, but the American automaker has started cutting orders for battery packs as it reassesses its short-term plans after demand for EVs in the United States went well under the company’s expectations.
The blue oval auto manufacturer’s latest move comes after other EV slowdowns. Despite seeing EV sales almost double in Q1 compared to the same period last year, Ford said it would delay its upcoming all-electric pickup known as “Project T3,” as well as a next-generation battery-powered three-row SUV to let the EV market mature. In the meantime, more hybrids will make their way into showrooms.
Last year, the maker of the Mustang Mach-E, F-150 Lightning and E-Transit announced it would significantly scale down the size of its new lithium iron phosphate (LFP) battery cell plant in Marshall, Michigan. The investment in the factory also went down from an initial $3.5 billion to around $2.2 billion.
In total, Ford wants to reduce spending by $12 billion on battery-powered vehicles, according to Automotive News. However, the upcoming sub-$30,000 EV has reportedly been fast-tracked, with a debut date sometime in 2026. The entry-level EV could have a starting price as low as $25,000, which will still be enough to turn a profit for Ford, the company’s CEO, Jim Farley, said during last month’s earnings call.
"What's really exciting for us is we see an opening in the market," Farley said. "We believe we can be profitable at $25,000 or $30,000."
