From CNBC: 2024-08-23 09:00:01

Ford prepares to shift focus to affordable EVs, anticipating that the high adoption rates for electric vehicles will be in the affordable segment. The automaker plans to introduce smaller, more affordable EVs to compete with Chinese newcomers like BYD, updating its EV strategy at a cost of up to $1.9 billion, with changes including canceling a large three-row SUV and delaying a full-size pickup. Ford’s current EVs are not profitable overall, with Model e operations losing nearly $2.5 billion in the first half of this year.

The cancellation of a three-row vehicle, in favor of a commercial van, and midsized pick-up, are part of Ford’s shift to capitalize on the growing demand for EVs, while focusing on smaller, more affordable vehicles. This move is aimed at improving the automaker’s competitiveness in the EV market, despite losses incurred from its current EV lineup. Investors and analysts have largely supported the changes.

Ford’s future capital expenditure plans shift focus from spending 40% on EVs to 30%, with more emphasis on hybrid and plug-in hybrid electric vehicles (PHEVs). The company aims to offer hybrid across its entire lineup in North America by 2030 and accelerate battery production in the U.S. to take advantage of tax incentives and credits. This strategic shift follows the slower-than-expected adoption of EVs in the market and to remain competitive against Chinese automakers.

The move towards more hybrid offerings aligns with industry trends, addressing both tightening fuel economy regulations and the slower-than-expected growth of EV adoption. Despite market spikes in demand for EVs in 2021 and 2022, growth has not been as rapid as expected. The fear of Chinese automakers dominating the EV market has prompted Ford to focus on more competitive and affordable EV offerings, underscoring the need for strategic adjustments for long-term profitability in the EV sector.



Read more at CNBC: Why Ford believes its $1.9 billion EV shift will benefit the automaker