Ford delays F-150 electric and cancels three-row SUV

Ford Motor Company has announced substantial changes to its electric vehicle (EV) roadmap. The American automaker is delaying the launch of its electric F-150 pickup and cancelling plans for a three-row electric SUV, signalling a shift towards cost-cutting measures and increased investment in hybrid technology.

Ford Chief Financial Officer John Lawler stated, "With pricing and margin compression, we've made the decision to adjust our product and technology roadmap and industrial footprint to meet our goal of reaching positive EBIT (earnings before interest and tax) within the first 12 months of launch for all new models." This move aligns with broader industry trends, as both Ford and General Motors have been recalibrating their EV strategies in response to slower-than-anticipated consumer adoption.

The company's revised plan includes pushing back the launch of the next-generation electric F-150 to the second half of 2027, a significant delay from the initially planned 2025 release. Ford asserts that this postponement will allow the incorporation of more advanced, cost-effective battery technology. Simultaneously, the automaker is introducing new electric models to its future lineup, including a mid-sized pickup and a commercial van, leveraging its strengths in the truck and commercial vehicle segments.

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In a notable shift, Ford is increasing its focus on hybrid vehicles, which have seen a surge in popularity as consumers seek a middle ground between traditional gasoline engines and fully electric options. This pivot is reflected in the company's capital allocation, with the share of annual spending dedicated to pure EVs declining from 40% to about 30%.

The strategic realignment comes at a cost, with Ford anticipating a special non-cash charge of approximately USD 400 million for the write-down of assets related to the cancelled three-row SUV. This decision may also result in additional expenses and cash expenditures of up to USD 1.5 billion.

CEO Jim Farley emphasised the importance of reducing EV production costs, particularly in light of increasing competition from Chinese manufacturers and Tesla. Farley is placing significant emphasis on Ford's specialised team in California, which is developing an architecture for affordable EVs. The first vehicle based on this new technology is slated to be the mid-sized electric pickup, set for release in 2027.

In an effort to capitalise on U.S. government incentives and further reduce costs, Ford is relocating some of its battery production. The company plans to move production of batteries for its Mustang Mach-E from Poland to Holland, Michigan, in partnership with LG Energy Solution. Additionally, Ford's joint venture with SK Innovation in Kentucky will begin manufacturing cells for the E-Transit van in mid-2025, with production for a new electric commercial van starting in Tennessee later that year.

The automaker remains committed to its lithium iron phosphate (LFP) battery production plans, which are on track to begin in 2026 at its battery park in Michigan. This production is expected to qualify for benefits under the Inflation Reduction Act (IRA). Ford's licensing agreement with Chinese company CATL for LFP battery technology remains unchanged, despite criticism from some lawmakers.