In recent years, major car companies have spent billions chasing Tesla. But weaker demand for electric cars is now forcing Ford to make a U-turn.
Ford is bowing to the weakness of the electric car market and will not build a battery-powered SUV with three rows of seats. The turnaround will cost the US auto giant up to 1.9 billion dollars (1.7 billion euros). The SUV had already been postponed from 2025 to 2027.
Ford is currently making high losses quarter after quarter in its electric car division, while the combustion engine models and the commercial vehicle division are making money. Demand for vehicles with hybrid drives has been particularly strong recently.
Ford is now drawing fundamental conclusions: Capital expenditure on electric models will be cut from 40 percent of the annual budget to 30 percent. The successor model for the large electric pickup F-150 Lightning will now only come onto the market at the end of 2027 instead of 2025. In the meantime, Ford wants to make the batteries cheaper, among other things.
Electric delivery van has right of way
Every new model should be profitable in the first twelve months, emphasized CFO John Lawler at the announcement. The priority for electric models is now a delivery van, which is scheduled to go into production in 2026, and a mid-size pickup truck planned for 2027.
The sales boost, especially at market leader Tesla, during the Corona pandemic encouraged the major car companies to invest billions in expanding their electric car business. Recently, however, demand has weakened significantly, which Tesla is also feeling. Ford competitor General Motors also recently put the brakes on its electric car plans.
Ford CEO Jim Farley told financial service Bloomberg that he was very pleased with the planned large electric SUV, “but there was simply no way it could meet our aspirations of being profitable.”
Competitor Lucid: Hybrids are a dead end
Meanwhile, Tesla competitor Lucid is sticking to its plans for just such a vehicle. The first buyers should receive the SUV Lucid Gravity by the end of this year, company boss Peter Rawlinson told the technology blog “The Verge”. He was convinced that the weakness in the electric market was “just a temporary blip” and criticized the focus on hybrid drives as a “dead end”. Lucid is currently making heavy losses with its first model and is financed by billions in investments from Saudi Arabia.
Source: Stern
