Ford employees produce the electrical F-150 Lightning pickup on Dec. 13, 2022 on the automaker’s Ford Rouge Electric Vehicle Center (REVC).
Michael Wayland | CNBC
Ford Motor said Thursday that many purchasers in North America aren’t any longer willing to pay a premium for an electrical vehicle over an internal-combustion or hybrid alternative.
Consequently, it’s postponing about $12 billion in planned spending on recent EV manufacturing capability.
Customers’ reluctance to pay extra for EVs has complicated Ford’s ambitious and expensive plans to sharply increase production of those vehicles. While Ford’s – and the industry’s – sales of EVs are growing, they don’t seem to be growing on the pace Ford had expected.
Ford executives emphasized that the corporate is not cutting back its spending on future electric vehicle models. Nevertheless it now plans to ramp up its EV manufacturing capability, and its spending on that capability, more step by step than previously planned.
“We’re not moving away from our second generation [EV] products,” CFO John Lawler said in a media briefing Thursday. “We’re, though, taking a look at the pace of capability that we’re putting in place. We’re going to push out a few of that investment.”
Ford Motor said Thursday that many purchasers in North America aren’t any longer willing to pay a premium for an electrical vehicle over an internal-combustion or hybrid alternative.
Lawler said that Ford will postpone about $12 billion in planned spending on manufacturing capability for EVs, including a planned second battery plant at a recent campus in Kentucky. But, he noted, construction of Blue Oval City – Ford’s recent EV manufacturing campus in Tennessee – will proceed as originally planned.
“The shopper goes to choose what the volumes are,” Lawler said. “Ford is capable of balance production of gas, hybrid and electric vehicles to match the speed of EV adoption in a way that others cannot.”
As a part of its third-quarter earnings report, Ford said on Thursday that its electric-vehicle business unit, called Ford Model e, lost $1.3 billion on an operating basis in the period. That is roughly double its year-ago loss, despite a 26% increase in revenue.
Through the primary three quarters of 2023, Model e posted an operating lack of about $3.1 billion, on target with Ford’s previous guidance calling for a full-year operating lack of $4.5 billion for the Model e business unit.
Ford withdrew all of its 2023 guidance Thursday in light of its tentative take care of the United Auto Staff labor union.