Ford Motor is reassessing its electric vehicle (EV) strategies, including the need for vertical integration of batteries, according to CEO Jim Farley. The company plans to delay or cut $12 billion in spending on all-electric vehicles, as sales have been growing at a slower rate than expected. Farley stated that Ford is rationalizing the level and timing of its battery capacity to match demand and considering new chemistries and capacities. He also mentioned that widespread adoption of EVs won’t happen until costs are more in line with traditional vehicles.
Ford’s EV business, known as Model e, lost $4.7 billion in 2023, including $1.57 billion in the fourth quarter. The company’s CFO, John Lawler, emphasized the need for the unit to stand on its own financially sooner rather than later. As a result, Ford is pulling back from its target of an 8% margin for the EV unit by 2026 and reevaluating its next-generation EVs to ensure profitability. However, Ford remains committed to EVs and believes they will eventually grow in popularity.
While reassessing its EV business, Ford is focusing on the sales of hybrid vehicles, particularly trucks. The company predicts a 40% increase in hybrid sales this year and sold 133,743 hybrid vehicles in the US in 2023. Ford intends to lean into hybrid sales until the costs of EVs become more competitive with traditional vehicles.
Overall, Ford’s reevaluation of its EV strategy reflects the challenges faced by the industry in achieving mass-market adoption of electric vehicles. The company recognizes the importance of aligning battery capacity with demand and reducing costs to make EVs more accessible to consumers. In the meantime, Ford will prioritize hybrid vehicle sales to bridge the gap until EVs become more financially viable.
In conclusion, Ford’s CEO Jim Farley announced that the company is reassessing its electric vehicle strategies, including the need for vertical integration of batteries. Ford plans to delay or cut spending on all-electric vehicles and focus on rationalizing battery capacity to match demand. The company acknowledges that widespread adoption of EVs will only happen when costs are more competitive with traditional vehicles. In the meantime, Ford will prioritize hybrid vehicle sales, particularly trucks, to bridge the gap until EVs become more financially viable.
 strategies, including battery integration and spending cuts, as sales have been slower than expected. The company aims to align battery capacity with demand and reduce costs to make EVs more accessible. Ford will prioritize hybrid vehicle sales until EVs become more financially viable.){kind=link}