Ford halts plans for electric SUV amid consumer concerns over range and costs

Ford Motor Company announced a major shift in its EV strategy on Wednesday, scrapping plans to build an all-electric three-row SUV as consumers remain concerned about the cost and range of the electric vehicles.

The Dearborn, Michigan car maker said it intends to prioritise hybrid vehicles for its next three-row SUVs, along with an electric commercial van in 2026 and two electric pickup trucks in 2027. Ford said it will take a special non-cash charge of about $400 million for the write-down of certain assets of the previously planned electric three-row SUVs. The car maker said the actions could results in additional expenses and cash expenditures of up to $1.5 billion.

The US company is the latest car maker to scale back its EV strategy as consumers – concerned about road range and cost – are slower to adapt to EVs than executives had anticipated. GM, Volkswagen and others previously announced delays or reductions in their plans.

Ford said cost-conscious vehicle consumers and a more competitive market have amplified price pressures, which “underscore the necessity of a globally competitive cost structure”.

“With pricing and margin compression, we’ve made the decision to adjust our product and technology road map and industrial footprint to meet our goal of reaching positive Ebit [earnings before interest and taxes] within the first 12 months of launch for all new models,” Ford president and chief executive Jim Farley said.

The company said its mix of capital spending dedicated to pure electric vehicles will decline from 40 per cent to 30 per cent.

“We learnt a lot as the No. 2 US 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,” Mr Farley said.

Ford is also delaying the launch of its next electric pickup truck – named “Project T3" – to the second half of 2027. The successor to its best-selling EV pickup truck the F-150 Lightning, Ford said the retiming will allow the company to use lower-cost battery technology. The vehicle will be produced at Ford's Tennessee plant. Ford is also developing a mid-size pickup truck designed by its “skunkworks” team in California.

In addition, Ford announced changes on the sources of its EV batteries, including moving the production of some Mustang Mach-E battery production from Poland to Michigan next year to qualify for benefits under President Joe Biden's Inflation Reduction Act.

Ford is expected to provide an update on “electrification, technology, profitability and capital requirements” in the first half of 2025.