- Ford is shifting its EV strategy to emphasise profitability, efficiency, and a broader range of zero and low-emissions vehicles.
- The company is optimising battery sourcing and production to lower costs and align with tax incentives.
- Ford will release a detailed update on its electrification strategy, technology advancements, and capital needs in early 2025.
Ford re-thinks its approach to EVs as it focusses on lower battery costs and wide-ranging offerings
Ford is re-assessing its EV strategy to bring profitability and efficiency to the forefront. The automaker is adjusting its approach to focus on its competitive strengths and broaden its range. This announcement comes just weeks after an interview with Ford CEO, Jim Farley, in which he stated that the US needs to focus on smaller, more profitable EVs.
Ford President and CEO Jim Farley, explained the change:
“We are committed to innovating in America, creating jobs and delivering incredible new electric and hybrid vehicles that make a real difference in CO2 reduction.
We learned a lot as the No. 2 U.S. electric vehicle brand about what customers want and value, and what it takes to match the best in the world with cost-efficient design, and we have built a plan that gives our customers maximum choice and plays to our strengths.”
Starting in 2026, Ford will launch an all-new electric commercial van, which will be produced at its Ohio Assembly Plant. This will be followed in 2027 by two new electric pickup trucks. A medium-sized model will be developed by Ford’s California team, and a next-generation truck will be assembled in Tennessee. The latter will be based primarily on the success of the best-selling F-150 Lightning.
Jim Farley continued:
“We recruited the most technically skilled and creative professionals from inside and outside Ford to drive a radical change in how we develop an electric vehicle.
The work of this highly talented team has evolved into a critical enabler of our electric vehicle strategy. These electric vehicles will be lower cost, and not compromised in any way.”
Ford is also realigning its battery-sourcing strategy to cut costs and align with the IRA rules. The company will optimise its battery supply chain to improve efficiency and support its expanding lineup.
The company will then expand its battery production capabilities. The Mustang Mach-E’s battery production will shift to Michigan in 2025, allowing Ford to qualify for tax incentives under the IRA. Additionally, new battery plants will support the company’s future EV models.
Farley commented:
“An affordable electric vehicle starts with an affordable battery. If you are not competitive on battery cost, you are not competitive.”
Unfortunately, not all of the good news is fully electric. Part of the announcement is a pivot to hybrid technology for its upcoming three-row SUVs. In doing so, they are abandoning earlier plans for fully electric models. This decision comes with a $400 million write-down on assets related to the now-cancelled electric SUVs.
The updated strategy includes a blend of hybrid, electric, and other electrified propulsion options across Ford’s truck lineup. This diversified approach is intended to cater to a wide range of customer needs while managing production costs. Infrastructure is a notable stumbling block for would-be EV adopters. Until drivers are certain they will be able to charge whenever they need to, we can expect hybrid technology to stay relevant, as a comfortable middle-ground for many consumers.
Ford is expected to release a comprehensive update on its electrification efforts, technology advancements, profitability, and capital requirements in the first half of 2025. This report will provide further insights into how Ford plans to navigate the competitive and rapidly evolving EV market.
