FYI: Ford has announced a major shift in its electric vehicle (EV) strategy, significantly altering its timeline and approach to EV production.
### Ford Resets EV Agenda Amid Financial Struggles and Mixed Sales
In the early hours of today, Ford unveiled a substantial overhaul of its EV strategy in response to inconsistent sales and considerable financial setbacks. Rather than launching a compact truck or crossover, the company’s first EV on its new platform will be a midsized truck. Unfortunately, this strategic pivot has led to the cancellation of the three-row electric SUV originally slated for release this year, despite a $400 million investment in its development. The replacement for the Ford F-150 Lightning, initially expected in 2025, is now postponed to 2027.
Moreover, Ford has trimmed its EV spending by 10% and instituted a stringent new policy: any EV must reach profitability within the first 12 months on sale, or the project will be terminated.
### Reaction from the EV Community and Analysts
These decisions have left EV enthusiasts and analysts puzzled. While Ford has not axed the Mach-E or the Lightning, aside from a new E-Transit van in 2026, no new EVs will be introduced until 2027. This adjustment leaves gaps in Ford’s EV lineup.
Corey Cantor, an EV analyst with BloombergNEF, expressed deep concern about the timing of Ford’s withdrawal. Cantor suggests that this recalibration could place Ford at a competitive disadvantage if other automakers show better foresight in navigating the EV landscape. “The recalibration of its strategy could leave it on the back foot if other automakers prove to have read the EV landscape better,” Cantor noted in a BloombergNEF post.
### Background and Industry Impact
Ford’s shift in strategy comes amidst broader market trends. Despite a growing market share for EVs, the brand has backtracked on several commitments over the last 18 months. In 2023, it scaled down its production goals for the F-150 Lightning, and soon after, it dialed back its Model E dealer plan, which required dealerships to opt-in and invest to sell Ford’s EVs. Additionally, the company reduced funding for two battery plants, including a joint venture with Chinese battery giant CATL.
“Ford’s step back could affect the longer-term outlook for EV uptake in North America but also open the door for rivals to do the same,” Cantor wrote. Scaling back investments now could hamper Ford’s momentum and leave an opening for competitors to capture market share.
### Competitive Landscape
While Ford boasts increased sales of the Mustang Mach-E and holds the position of the second-largest EV manufacturer in the U.S., the future is uncertain. Hyundai and Kia, for instance, are expanding their EV market share, with a joint factory in Georgia set to begin operations soon. The brands plan to introduce at least three more EV models before 2027, including the Hyundai Ioniq 9 and the budget-friendly Kia EV3 and EV4.
General Motors (GM) has also adjusted its EV plans but aims to release a new version of the Bolt EV for budget buyers, along with more models. This places pressure on Ford, which will not introduce new EV models until 2027.
### International Context
In Europe, Ford has the Capri and Explorer EV models, although they are VW-based stopgaps and not planned for the U.S. market. Moreover, the upcoming U.S. presidential election could greatly influence automakers’ strategies. A Donald Trump victory might see relaxed fuel economy standards, while a Kamala Harris victory could maintain or tighten current regulations, further impacting Ford’s position.
### Global Competition
Honda and Toyota are finally making serious moves in the EV market, adding pressure on Ford. Additionally, Chinese brands like BYD and Zeekr pose an international threat with their substantial scale and aggressive market expansions.
“We see the Chinese as the main competitor, not GM or Toyota,” Ford’s CEO Jim Farley remarked. “To beat them, you either need a distinct brand—which we think we have, by leaning into our icons—or you have to beat them on cost. But how do you beat them on cost if their scale is five times yours?”
As Ford pushes its EV plans further out, the industry will be watching to see if the company’s strategy will successfully position it for competitive success in 2027.
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### Conclusion
Ford’s current strategy leaves many questions unanswered about its long-term competitiveness in the EV market. While the company has adjusted its plans in response to financial challenges, the delay in new model introductions and cuts in EV investment might risk its standing against rising competitors like Hyundai, GM, and various international manufacturers.
William Kouch, Editor of Automotive.fyi
