Ford's latest pullback adds to EV uncertainty
LOUISVILLE, Ky. (WDRB) — Ford Motor Co.’s latest pump of the brakes on its electric vehicle strategy adds uncertainty about the pace of the EV transition, an important question for Ford Motor Co. has announced that it will delay rolling out new electric pickup trucks and a new large electric SUV as it adds gas-electric hybrids to its model lineup. The company will also postpone production of an EV pickup at a new factory in Tennessee by a year until 2026, while a large electric SU with three rows of seats will be delayed by two years until 2027 at the company's factory in Oakville, Ontario near Toronto. This latest move adds uncertainty about the pace of the EV transition in Kentucky. This is not the first time Ford has reduced its ambitions for electric vehicles; it plans to offer hybrid-electric versions of all its gas-powered passenger vehicles by 2030. Despite this, analysts suggest that domestic automakers need to produce cheaper EVs to win a larger share of mainstream consumers.
Published : 4 weeks ago by Chris Otts in Business Auto
LOUISVILLE, Ky. (WDRB) — Ford Motor Co.’s latest pump of the brakes on its electric vehicle strategy adds uncertainty about the pace of the EV transition, an important question for the future of Kentucky’s auto industry.
The Dearborn, Michigan, company said Thursday it will delay rolling out new electric pickup trucks and a new large electric SUV as it adds gas-electric hybrids to its model lineup.
Ford will push off production of an EV pickup at a new factory in Tennessee by a year until 2026, while a large electric SUV with three rows of seats will be delayed by two years until 2027 at the company's factory in Oakville, Ontario near Toronto.
Thursday’s announcement is only the latest paring of Ford’s EV ambitions. Last month, the company slashed the workforce at its factory in Michigan that produces the EV version of its F-150 pickup.
And last year, the company said it would put off about $12 billion EV-related investments, including indefinitely delaying the start of production at one of the two massive EV battery factories it’s building with Korean partner SK On in Kentucky.
Ford also said Thursday that it plans to offer hybrid-electric versions of all its gas-powered passenger vehicles by 2030.
Electric vehicles are still a growing segment of the auto industry, but over the last year, the growth has slowed, with EVs representing about 8% of the new vehicle market, according to Kelley Blue Book.
Ivan Drury, director of insights at auto site Edmunds, said Ford’s most recent pullback shows how domestic automakers need to figure out how to produce cheaper EVs to win a larger share of mainstream consumers.
“These vehicles are not selling right now at these prices … They are very expensive. So, when you kind of take a step back from all the enthusiasm that we’ve seen over the years, and we look at where we are today it really is the most logical decision right now for Ford,” Drury told WDRB News.
Ford once told Wall Street to expect 8% profits on EVs, but recent results underscore how far the company is from that goal. Ford expects pretax losses for its electric vehicle unit to widen from $4.7 billion last year to a range of $5 billion to $5.5 billion this year.
For the near future, Ford’s profits will come from its traditional gas vehicles and its business selling to fleets and commercial customers like plumbers and electricians.
While none of the changes announced Thursday directly affect local Ford factories, thousands of Kentucky jobs depend on the pace of the overall EV transition.
Ford and SK On are building two side-by-side EV battery plants just south of Louisville in Glendale. But while the first plant will begin production next year, the second plant is indefinitely delayed, along with the 2,500 jobs it will create.
Meanwhile, Ford’s Louisville Assembly Plant, where the Escape SUV is made, is scheduled to produce an “all new” unnamed EV when the Escape’s life cycle is complete, according to Ford’s product commitments in the United Auto Workers contract approved last year. Analysts see that transition happening in 2026.
Louisville Assembly is also example of Ford’s new emphasis on hybrid powertrains. The Escape SUV made there is the only plug-in hybrid Ford currently offers, with the ability to charge via a plug and drive for about 35 miles on electricity alone.
The conventional and plug-in hybrid models appear to be helping the Escape — whose sales peaked in 2017 — to bounce back recently. Escape sales were up 73% from a year earlier in the first quarter of 2024, according to figures released Wednesday. Ford does not disclose the share of Escape sales represented by hybrids.
Ford is not the only automaker planning an all-electric version of the three-row SUV, one of the most popular vehicle segments in the U.S.
Japanese auto giant Toyota said last year that its first U.S.-made EV would be a three-row SUV coming to its Georgetown, Ky. factory in late 2025.
While Ford said Thursday it would delay its three-row SUV until 2027, Toyota is on track to begin producing the EV SUV in late 2025 or early 2026, Toyota spokeswoman Kim Ogle said Thursday.
Ford executives in recent months have played down the prospects for big EVs with large, expensive batteries, saying the future is in a low-cost EV platform the company is developing.
A large EV “better be really functional or a work vehicle,” Ford CEO Jim Farley said in February at an investor conference.
Drury, the Edmunds analyst, said the market for three-row EVs is “debatable.” While cars with three rows are popular, the lack of abundant charging stations would be more of a problem for a large EV than a commuter vehicle.
“If you have a three-row, you probably drive longer. You take more road trips. You need that infrastructure to be there,” he said.
The Associated Press contributed to this story.