Ford Motor Co. is adjusting its electric vehicle strategy to focus on developing two new electric pickup trucks and a commercial van. The company aims to offer these vehicles at a lower cost, with longer range, and achieve profitability within a year of launch.
While details about the new products are limited, Ford announced that production of its next-generation full-size electric pickup truck in Tennessee will be delayed until 2027. Additionally, the company will not pursue fully electric three-row SUVs due to high battery costs, opting instead to focus on gas-electric hybrid versions.
The new mid-sized pickup truck, based on new underpinnings developed in California, is set to hit the market in 2027. Production of an unspecified electric van will commence in 2026 at an assembly plant near Cleveland.
As a result of these strategic shifts, Ford will incur a $400 million write-down of current assets and anticipates additional expenses of up to $1.5 billion. The company plans to reduce capital spending on EVs from 40% to 30% of its annual budget.
Ford's Chief Financial Officer emphasized the commitment to building a competitive and profitable business in the evolving global EV market. The company acknowledges the need for a cost-effective structure to compete with automakers from China, who benefit from lower production and engineering costs.
Despite incurring losses of $2.46 billion on EVs in the first half of the year, Ford aims to align its strategy with changing market dynamics and shifting consumer preferences towards more cost-conscious options. The company's goal is to ensure profitable growth and capital efficiency by focusing on globally competitive cost structures and strategic product segments.
Following the announcement, Ford's shares rose by 1.4% in pre-market trading. The company's decision reflects a strategic shift to adapt to the evolving landscape of the electric vehicle market while prioritizing profitability and competitiveness.
