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Ford is lighting its EV strategy on fire faster than a Tesla battery in a hurricane.
After steadily walking back its electrification plans over the past year, the automaker announced today it has cancelled its next electric car, a three-row SUV, and will instead pursue hybrid SUVs. It will also delay production at its EV plant in Tennessee, which was expected to start next year.
"This is really about us being nimble and listening to responses from customers," says John Lawler, Ford vice chair and chief financial officer, as reported by the Detroit Free Press. "What we’re understanding is that customers want more electrification choices."
Lawler called the update a "tough decision" and cited the need to establish a sustainable electric vehicle business in the long run. The company determined that the three-row electric SUV would not be profitable within the first 12 months of launch, so instead, it will pursue other vehicles, including an electric commercial van set to debut in 2026.
In addition to being expensive for Ford to produce, EVs are expensive for consumers to purchase. Today's car shoppers are "more cost-conscious than early adopters," Ford says, and are "looking to electric vehicles as a practical way to save money on fuel and maintenance, as well as time by charging at home."
Ford has struggled to make more affordable EVs, largely due to high battery costs and lack of manufacturing scale that have given its Chinese competitors an edge.
"The electric vehicle market is rapidly evolving as Chinese competitors leverage advantaged cost structures," Ford says. "An affordable electric vehicle starts with an affordable battery. If you are not competitive on battery cost, you are not competitive.”
The announcement means drivers will not get a new passenger EV from Ford until 2027, when it will launch two electric pickups. One of those trucks will come out of the so-called "skunkworks" team Ford assembled in 2022 and tasked with developing a more affordable EV platform.
“The work of this highly talented team has evolved into a critical enabler of our electric vehicle strategy," Ford CEO Jim Farley says. "These electric vehicles will be lower cost, and not compromised in any way.”
In the meantime, the automaker's limited electric lineup, which includes just the F-150 Lightning and Mustang Mach-E, will rely on over-the-air updates for new features. Battery production for the Mach-E will move from Poland to Holland, Michigan, in 2025, so buyers can qualify for the federal tax credit.
The other three-row SUVs on the market include the Kia EV9, Rivian R1S, and soon, the Volkswagen ID. Buzz. The Kia and Rivian have sold well in the US, but Ford says its customers are primarily families who use three-row SUVs for long-distance travel. Hybrids are less time-consuming to take on road trips, as they do not require plug-in charging.