On Monday, Ford announced it is scaling back its electric vehicle plans, which will result in a $19.5 billion charge to its earnings, largely taken this current quarter.
But apart from this cost, the company said this quarter should be quite good due to strong sales of conventional gasoline trucks and sport utility vehicles. The firm boosted its annual operating profit target by $7 billion.
However, the reduction in EV plans also signifies that the flagship F150 Lightning electric vehicle will be paused indefinitely. Ford stated that the next iteration of the F150 will feature a 700-mile range and enhanced heavy-duty towing. On Monday, the corporation declared a halt to production of its original F150 Lightning model this month. Details on when production for the new variant will commence, however, were not disclosed.
Demand for electric vehicles surged during the summer and September due to the impending expiration of the $7,500 tax credit for EV buyers. Ford’s electric vehicle sales increased by 30% in the third quarter compared to the preceding year, the company reported in October. But these sales amounted to only 30,600 vehicles, which is slightly under 6% of total U.S. sales. Although the firm has not disclosed Q4 EV sales, external estimates suggest that all U.S. electric vehicle sales have sharply declined.
Ford and other automakers heavily invested in EV strategies anticipating stringent environmental rules introduced during the Biden administration. They also expected certain states to follow California’s lead and ban gasoline vehicle sales within a decade.
However, the Trump administration rescinded those emissions regulations along with financial assistance for electric vehicles and is challenging states’ authority to impose stricter rules. Consequently, Ford is exploring avenues to utilize some of these resources beyond solely electric vehicles. One plan announced by the company on Monday involves repurposing some of the EV battery capacity for energy infrastructure and the expanding needs of data centers.
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