Creator( )Associated Press with Euronews
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Faced with financial losses, Ford is pivoting from its once-ambitious electric vehicle plans and prioritizing investments in gasoline engines and hybrid electric vehicles, the company announced Monday.
The Detroit automaker, which like most of its peers has committed billions of dollars to electrification, announced it will no longer build the F-150 Lightning electric pickup truck, opting instead for an extended-range version of the vehicle.
Ford also plans to introduce some manufacturing changes. The Tennessee Electric Vehicle Center, part of the Blue Oval City campus and once the future home of Ford’s EVs and batteries, will be renamed the Tennessee Truck Plant and will instead produce new affordable gas-powered trucks. Ford’s Ohio assembly plant will produce new gasoline and hybrid vans.
The future of Blue Oval City
The company said it has incurred a $13 billion (€11.06 billion) EV-related loss from 2023 onwards, and expects to take a $19.5 billion (€16.59 billion) hit in the fourth quarter, primarily from its EV business.
“This is a customer-led transformation that creates a stronger, more resilient and more profitable Ford,” CEO Jim Farley said in a statement.
“Operational realities are changing, and we are reallocating capital to higher-margin growth opportunities like the Ford Pro, our market-leading trucks and vans, hybrids, and our new battery energy storage business.”
Ford now expects that by 2030, half of its global sales will be hybrids, long-range EVs (also with gas engines) and fully electric, up from 17% this year.
“Ford’s decision to discontinue the electric F-150 Lightning isn’t all that surprising given that the truck never reached factory capacity. Ford’s choice to retrofit an existing gas-powered vehicle with an electric drivetrain was the right choice in hindsight, as it reduced initial costs,” Sam Fiorani, vice president of AutoForecast Solutions, told The Associated Press.
“For months, the future of the Blue Oval City has been in question, and this announcement sets the tone for this massive plant,” Fiorani added. “Adding an affordable vehicle to Ford’s lineup fills a clear gap in the market.”
Hurdles to electrification
Several other automakers have also changed their electrified product plans in recent years as consumer demand for EVs in the U.S. has not met expectations.
EVs accounted for about 8% of new vehicle sales in the U.S. last year, but factors such as cost and charging infrastructure remain concerns for mainstream buyers.
According to car buying information site Kelley Blue Book, the average transaction price for a new EV last month was $58,638 (49,900 euros), while the average transaction price for all new cars was $49,814 (42,400 euros).
Meanwhile, while the availability of public charging has improved, the industry still relies on home charging as a selling point to potential buyers, and not everyone can charge at home.
political change
President Donald Trump has significantly shifted U.S. policy away from EVs since his second term in office, calling the pro-EV policies launched under former President Joe Biden a “mandate.”
Biden-era policies encouraged the adoption of EVs, such as generous tax breaks for consumers and tailpipe and fuel economy regulations for automakers, but there were no policies requiring the industry to sell EVs or requiring Americans to buy them. Biden’s goal is for half of all new U.S. car sales to be electric by 2030.
The Trump administration has since lowered that goal, eliminating the EV tax credit and proposing relaxing emissions and fuel economy regulations.
“The one-two punch of slow public adoption of EVs and the Trump administration’s soft stance on fuel economy and emissions is prompting all automakers to rethink their current direction,” Fiorani added. “Electric cars are still the future, but the transition to EVs has always taken longer than automakers have promised the public.”