Detroit – Ford Motor Company The automaker said Wednesday it was delaying production of its next-generation all-electric pickup truck at a new Tennessee factory and canceling plans for a three-row electric SUV.
Ford said it would instead prioritize developing hybrid models and electric commercial vehicles, including a new electric commercial van in 2026, followed by two electric pickup trucks in 2027.
The pickup trucks are expected to be a full-size truck to be produced in 2027 at a Tennessee plant currently under construction, and a new mid-size truck being developed by a specialized “Skunk Works” team in California.
“Based on what we’ve learned in the market and what we’ve seen where people are gravitating, we’re going to stay focused where we have a competitive advantage – commercial ground trucks and SUVs,” Ford Chief Financial Officer John Lawler said Wednesday.
Lawler, who also serves as the company’s vice chairman, said the steps are aimed at better positioning the company to be more capital efficient and profitable in its electric vehicle business, but they will come at a cost to the company in the short term.
Ford said it will take special non-cash charges of approximately $400 million due to the impairment of certain product-specific manufacturing assets, including the discontinuation of three-row SUVs.
The Ford Mustang Mach-E and F-150 Lightning will be showcased at the New York International Auto Show on March 28, 2024.
Daniel DeVries | CNBC
The company said the changes could result in additional costs and cash outflows of up to $1.5 billion, which Ford plans to reflect as special items in the quarter in which they occur.
Lawler said the company’s future capital spending plans will shift spending on all-electric vehicles from about 40% to 30%. He did not provide a timeline for the change.
Vehicle production at the new $5.6 billion Tennessee factory was originally scheduled to begin next year, but the company said it expected the plant to start making battery cells in 2025.
The change is the latest for Ford and comes as EV adoption has been slower than expected and automakers have struggled to profitably produce them.
The new plans come about five months after Ford said it would delay production of its three-row SUV and next-generation pickup truck, code-named the T3.
“This is really about us being nimble and listening to the response from our customers,” Lawler said on a conference call Wednesday morning. “We [EV] “We’ve been in this market for more than two years now, we’ve learned a lot, and we understand that customers want more electrified options.”
Ford says its next-generation EV rollout will begin with a commercial van assembled at its Ohio Assembly Plant in 2026.
The company had previously said it wouldn’t launch an EV unless it saw a clear path to profitability in the first year, a shift in focus to sell EVs at a loss to help boost market share and meet fuel and emissions standards.
Ford said it will continue building and updating its current all-electric vehicles, including the Ford Mustang Mach-E crossover and F-150 Lightning pickup truck.
The company said it plans to provide investors with an “update on electrification, technologies, profitability and capital requirements” in the first half of 2025.
