Ford on Wednesday said it had canceled plans for a three-row all-electric SUV as part of a reshuffling of its electric vehicle roadmap.The automaker also pushed back the production of a new electric pickup truck.CFO John Lawler pointed to pricing and margin compression as factors in the decision.
Ford Motor Company (F) is reworking its electric vehicle (EV) plans amid tough competition from local and foreign rivals and price pressures.
The automaker said on Wednesday it was nixing plans to develop an all-electric three-row SUV. Its next SUVs will instead be hybrids. Ford said it would take a $400 million non-cash charge to write down certain model-specific manufacturing assets. It warned the decision could also result in additional expenses of up to $1.5 billion.
The company also delayed the rollout of its next-generation electric truck, dubbed “Project T3,” to the second half of 2027. The truck will succeed the F-150, which, according to Ford, is America’s best-selling electric truck.
In its place, the company will launch a new electric commercial van, which it expects to power with battery cells produced at its BlueOval City plant in Tennessee starting in 2025.
The company highlighted intense competition from Chinese rivals, a glut of new EV models hitting the market in the next year, and increasing compliance requirements as reasons for the company’s reappraisal of its roadmap.
“We’re committed to creating long-term value by building a competitive and profitable business,” Chief Financial Officer John Lawler said. “With pricing and margin compression, we’ve made the decision to adjust our product and technology roadmap and industrial footprint to meet our goal of reaching positive EBIT within the first 12 months of launch for all new models.”
Ford’s foray into EVs has been expensive. Its EV unit, Model e, reported a loss of nearly $2.5 billion in the first half of 2024.
High costs and sluggish demand have led the carmaker to repeatedly adjust its EV plans. In October 2023, the company said it would delay $12 billion in EV manufacturing investments in response to softer-than-expected consumer demand.
Ford shares gained 1.6% on Wednesday.
