Ford is adjusting its electrification product roadmap in the hopes of offering a range of electrification options that might speed customer adoption—including lower prices and longer ranges. Among the changes are the cancellation of the previously announced three-row all-electric SUV in favor of leveraging hybrid technologies for the next three-row SUVs.
As a result of this decision, the company will take a special non-cash charge of about $400 million for the write-down of certain product-specific manufacturing assets for the previously planned all-electric three-row SUVs. These actions may also result in additional expenses and cash expenditures of up to $1.5 billion and the company will reflect those in the quarter in which they are incurred, as a special item.
Ford noted that the electric vehicle market is rapidly evolving as Chinese competitors leverage advantaged cost structures including vertical integration, low-cost engineering, multi-energy advanced battery technology and digital experiences to expand their global market share.
In addition, today’s electric vehicle consumers are more cost-conscious than early adopters, looking to electric vehicles as a practical way to save money on fuel and maintenance, as well as time by charging at home. This, coupled with scores of new electric vehicle choices hitting the market over the next 12 months and rising compliance requirements, has amplified pricing pressures. These dynamics underscore the necessity of a globally competitive cost structure while being selective about customer and product segments to ensure profitable growth and capital efficiency, the company said.
John Lawler, Ford vice chair and chief financial officer said an important enabler to improve profitability is accelerating the mix of battery production in the US that will qualify for the Advanced Manufacturing Tax Credit. Also, given the propulsion options, and increasing demand for hybrids, Ford’s mix of annual capital expenditures dedicated to pure electric vehicles will decline from about 40% to 30%.
In its fully electric portfolio, Ford will prioritize the introduction of a new digitally advanced commercial van in 2026, followed by two new advanced pickup trucks in 2027 and other future affordable vehicles. Ford also realigned its US battery sourcing plan to reduce costs, maximize capacity utilization, and support current and future electric vehicle production.
The rollout of Ford’s next generation of electric vehicles begins with a commercial van that will be assembled at Ford’s Ohio Assembly Plant starting in 2026.
Ford has a strong commercial electric vehicle presence, led by E-Transit, which is America’s best-selling electric van suitable for businesses of all sizes. Commercial customers are transitioning more quickly to electric vehicles as they value the total cost of ownership and the productivity benefits that electric vehicles can provide.
In 2022, Ford established a skunkworks team in California focused on changing the company’s approach to next-generation vehicle development and bending the cost curve on electric vehicles. The team takes a systems-integration approach across design, engineering, supply chain and manufacturing to fundamentally rethink the full vehicle. Managed to reduce cost and complexity, the approach will go deeper into the supply chain and benchmark cost against the best competitors in the world.
