Ford scales back EV plans citing price pressures

Ford is shaking up its strategy for electric vehicles (EVs), scrapping plans for a large, three-row, all-electric SUV and postponing the launch of its next electric pickup truck.

Chief financial officer John Lawler said the firm was adjusting its plans in response to "pricing and margin compression".

The move comes as growth in demand for electric cars has faltered, leading to price wars and other pressures.

Ford said the new timetable would allow it to take advantage of technological advances in batteries and other areas that are expected to lower costs and expand how far the cars can go without charging.

Overall, the Michigan carmaker said changes would reduce the share of annual capital expenditures dedicated to "pure" electric vehicles from 40% to 30%.

They are expected to cost about $1.9bn (£1.5bn) in write-downs and new spending.

Chief executive Jim Farley said the firm had "learned a lot" from its efforts and had built a new plan that would give customers choice and "play to our strengths".

Just a few years ago, Ford outlined plans for an aggressive push to electric vehicles, with hopes to produce some two million a year by 2026.

It launched an electric version of its best-selling F-150 pickup truck in 2022 to great fanfare.

But Ford, like others in the industry including rival General Motors, had already said it would scale back its investments and ambitions, spooked by signs of weaker than expected consumer demand and preference for hybrids, which use a combination of fossil fuels and battery power.

Though sales of electric cars in the US have picked up again in recent months, competition has kept pressure on carmakers.

Ford reported last month it had sold more than 50,000 electric cars since the start of the year, up more than 60%.

But its electric business also lost nearly $2.5bn.

Ford said it was moving some battery production to the US from Poland, as part of its strategy to lower costs. The move will allow the firm to access government incentives from the Inflation Reduction Act.

"An affordable electric vehicle starts with an affordable battery,” Mr Farley said. “If you are not competitive on battery cost, you are not competitive."

Ford had initially expected to begin production of its next electric pickup truck next year at a new factory in Tennessee. That launch has been postponed until 2027, it said.

Ford will also offer a hybrid version of its large, three-row SUV, instead of an all electric, battery-powered model as planned.

It said it was focusing its all-electric efforts on a van for business customers, with assembly starting in Ohio in 2026.