Ford slashes EV budget, cancels new electric model amid financial challenges

Ford Motor Company has announced a series of adjustments to its electric vehicle (EV) strategy, following reports that the automaker is losing $100,000 on every EV sold. In response to these financial challenges, the company is scaling back its electric vehicle plans.

Originally slated to begin new EV production this year at its $5.6 billion manufacturing plant in Tennessee, Ford’s timeline for when this facility will start producing electric vehicles has now been pushed back to 2027.

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The automaker is also reducing its planned spending on EVs from 40% to 30% of its budget. This reduction includes canceling the development of a three-row electric SUV and delaying the launch of a next-generation all-electric pickup truck.

As a part of this shift, Ford is increasing its focus on hybrid vehicles, which combine traditional internal combustion engines with electric power. This pivot is expected to cost the company up to $1.5 billion, which comes amid slower than expected adoption of EVs throughout the U.S. this year.

Despite Ford’s shift, industry opinions remain divided. Some experts view the recent downturn in EV sales as a temporary setback. Executives from competitors like General Motors and Lucid Motors argue that hybrids are only a short-term solution and that fully electric vehicles represent the future of the industry.

However, Ford’s leadership emphasizes that their decision to pivot toward hybrids is driven by customer demand.