Ford Tweaks EV Lineup, Aims to Lower Vehicle Cost
Ford announced Wednesday a series of fresh changes to its electric vehicle lineup, including the scuttling of a planned SUV model, lifting shares despite a hefty near-term profitability hit.
The adjustments - which reflect a slower-than-expected transition to EVs in North America - will result in around $1.9 billion in cost hits to Ford's earnings, according to a Ford securities filing.
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A company news release describing the changes highlighted competitive pressures including low-expense Chinese EV producers and the heightened cost focus of current EV consumers compared with early EV adopters, who view the autos "as a practical way to save money on fuel and maintenance, as well as time by charging at home."
Ford's EV business lost about $2.5 billion in the first half of 2024 as the company contends costly production ramp-ups amid demand uncertainty. Among the changes, Ford is dropping a plan to produce a three-row electric utility vehicle that had previously been expected to be assembled in Oakville, Ontario.
Ford, which had previously pushed back the timing of the offering, will no longer produce the vehicle at all but plans to use some of the technology for a hybrid product.The manufacturer also pushed back the timeframe for a new "next-generation" EV pickup truck to the second half of 2027 after previously saying production would commence in 2025. It has also announced plans for a cheaper midsize EV pickup that will launch in 2027.
A new EV commercial van is also slated to begin production in 2026. "We have built a plan that gives our customers maximum choice and plays to our strengths," said Chief Executive Jim Farley, adding that the company has "learned a lot" from its EV business so far.
Ford shares rose 2.1 percent during morning trading.