In the wee hours of this morning, Ford announced changing its EV strategy amid uneven sales and huge financial losses Its first EV on its forthcoming new EV platform will be a midsized truck, not a compact truck or crossover. The three-row electric SUV made in Canada that was originally supposed to be released this year, is now dead despite the brand investing $400 million in the vehicle’s development. The Ford F-150 Lightning’s replacement once due in 2025, now won’t happen until 2027.
Ford has reduced spending on EVs by 10%, and instituted a new policy that says if an EV can’t reach profitability in the first 12 months it is on sale, then the project won’t move forward.
Other than that, everything's... fine?
But EV enthusiasts, and even some analysts, are baffled at the moves. Ford has no plans to cancel the Mach-E or Lightning, but aside from a new E-Transit van in 2026, it won’t introduce another EV until 2027. It has holes in its electric lineup in the meantime. And one EV-focused analyst with BloombergNEF, Corey Cantor, thinks this is the worst time to pull back from EVs.
Ford’s new plan leaves the automaker vulnerable, Cantor said. "The recalibration of its strategy could leave it on the back foot if other automakers prove to have read the EV landscape better,” Cantor wrote in a post for BloombergNEF.
Ford’s revamping its EV strategy didn’t happen in a vacuum. Although EV market share is continuing to grow, Ford has walked its EV promises back over the past 18 months in light of major losses and a softer-than-expected EV market. In 2023, Ford cut its production goals for the F-150 Lightning.
Then, not long after that, it reneged on its Model E dealer plan, where dealerships would have had to opt-in and pay money to sell Ford’s EVs. It pulled back spending on two battery plants including its joint venture with Chinese battery giant, CATL. Historically, Ford has had a habit of walking away from its EV goals.
That’s not good. “Ford taking a step back could reverberate across the longer-term outlook for EV uptake in North America but also open the door for rivals” to do the same, Cantor wrote.
Ford needs to improve its profitability and scale upwards ideally with new products that are easier to make. Cutting investments now—even if it looks good for quarterly earnings—rather than going the distance to keep its momentum going could be a mistake.
And yes, Ford does have momentum. Sales of the Mustang Mach-E are up. Ford is the second-largest EV manufacturer in the U.S.
But, for how long? Hyundai and Kia’s EV market share continues to grow. Its Georgia factory, which is shared between the two, will be online soon. It plans to release at least three more models before 2027, including the three-row Hyundai Ioniq 9, and the budget-oriented Kia EV3 and EV4.
GM has also similarly rethought its EV strategy, but it still has plans to introduce a new version of the Bolt EV to cater to budget buyers. It has a lot more models coming too, and seems to think it can make bigger EV batteries profitable too.
Ford won’t have anything until 2027.
Europe has the Capri and Explorer EV models, but they’re not planned for the U.S. Also, they’re just restyled Volkswagen products which aren’t all that relevant to Ford’s own development cycles, save for acting as a stopgap until Ford figures out what it will do in Europe.
And as Cantor notes, the U.S. presidential election could have some major ripple effects here.
A Donald Trump victory would certainly see the fuel economy standards relaxed and Ford wouldn’t need to invest in EVs as much. But, a Kamala Harris victory would likely keep the current ones in place (or even intensify them.) This means that Ford could be further behind, especially since foreign and domestic brands are continuing ahead with their EV plans.
Honda and Toyota are finally getting serious about EVs, and of course, there’s the existential threat posed by Chinese brands like BYD and Zeekr who effectively sell everywhere else in the world except for the U.S.
“We see the Chinese as the main competitor, not GM or Toyota," Farley said last year. "To beat them, you either have to have a very distinct brand—which we think we do, by leaning into our icons—or you have to beat them on cost. But how do you beat them on cost if their scale is five times yours?"
It's still a great question. It's one that's still unanswered in 2024. But with these EV plans pushed further out, you have to wonder if Ford will finally have an answer in 2027.
Contact the author: kevin.williams@insideevs.com
