Ford shares rose 1.4 percent in premarket trading on Wednesday. | Photo: Reuters
Faced with competition from lower-cost automakers, Ford Motor Co. is shifting its electric-vehicle strategy to focus on making two new electric pickup trucks and a new commercial van. The company says all will cost less, have greater range and be profitable within a year of arriving in dealerships.
Ford, which is losing millions on its current electric vehicles, gave few details about the new products but said production of its next-generation full-size electric pickup truck in Tennessee will be delayed 18 months, to 2027.
The company also says it won’t build all-electric three-row SUVs because of high battery costs, instead focusing on making those vehicles as gas-electric hybrids.
The other new pickup will be a midsize truck based on new components developed by a small team in California. It, too, will go on sale in 2027. Production of the pickup, whose manufacturing date has not been specified, will begin at an assembly plant west of Cleveland in 2026.
The changes will force Ford to write down $400 million of its current assets, and it also expects to incur additional expenses of up to $1.5 billion.
“We are committed to creating long-term value by building a competitive and profitable business,” Chief Financial Officer John Lawler said in a statement.
The company also said it will reduce capital spending on electric vehicles. It will now allocate 30 percent of its annual capital budget to their development, down from 40 percent currently.
Ford, which has long talked about making profitable electric vehicles, lost $2.46 billion on them in the first half of the year, cutting into profits at its commercial and gasoline units.
The company said in a prepared statement that the global electric vehicle market is changing rapidly and it must evolve to compete with Chinese automakers that have lower production and engineering costs.
At the same time, current buyers are more cost-conscious than early adopters, and automakers are introducing more electric vehicles.
This dynamic underscores the need for a globally competitive cost structure while being selective about customer and product segments to ensure profitable growth and capital efficiency, the company said.
Ford shares rose 1.4 percent in premarket trading Wednesday.
(Only the headline and image of this report may have been reworked by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
First published: August 21, 2024 | 21:44 IS
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