Ford to change its electric vehicle strategy

Ford admitted on Wednesday that the electric vehicle market in America is not what the automaker expected, as customers have become more price-conscious and concerned about range, so the company is making major changes to its electric vehicle plans, focusing on hybrids and offering affordable prices.

According to CNN, Ford announced that it is modifying its roadmap for cars in North America to include a wider range of electric vehicle options, including lower prices and increased range.

Ford has abandoned plans for its next lineup of all-electric SUVs and replaced them with hybrid models that typically offer shorter battery ranges but generally longer range when combined with a gasoline engine.

This plan alone will cost the company at least $400 million because it needs to write off manufacturing equipment it had set aside to build electric SUVs that it no longer plans to build, and Ford said the change in plans could ultimately cost it more than $1.5 billion.

But the company also said it would improve battery sourcing and manufacturing efficiency to save costs, and that only 30 percent of the company’s annual capital expenditures would go to pure electric vehicles in the future, down from 40 percent.

Ford trails Tesla in U.S. electric vehicle production, but its electric vehicle business is growing.

The Ford F-150 Lightning is the best-selling electric truck in the United States, but hybrid vehicles are increasingly popular in the United States, so Ford decided to meet customers where they are today.

“We’ve learned a lot as the No. 2 electric vehicle brand in the U.S. about what customers want and value, and what it takes to match the best in the world with cost-effective design,” Ford CEO Jim Farley said in a statement. “We’ve developed a plan that gives our customers maximum choice and plays to our strengths.” Ford will continue to build electric vehicles, but at a slower pace. Ford’s next entry into its electric vehicle lineup will be an electric commercial truck in 2026. That could help it compete with Rivian, which has a deal with Amazon that has put its electric trucks on the road across America.

After that, Ford will develop what it calls an “innovative” electric truck, called Project T3. The company plans to introduce the truck, which will feature bi-directional charging — it can charge your home in the event of a power outage — and improved aerodynamics in the second half of 2027.

That’s later than it originally planned, but Ford said the improvements it plans to make to battery manufacturing will help lower the cost of its truck by then.

“Electric vehicles are affordable when batteries are affordable,” Farley said. “If you can’t compete on battery cost, you’re not going to be competitive” in the electric vehicle market.