Ford has delayed $12 billion in investments for electric vehicle manufacturing capacity, citing concerns about the high costs of electric vehicles and a perceived slowdown in demand. This move mirrors a trend in the automotive industry, with other companies also reducing investments and scaling back their manufacturing goals for electric vehicles.
Ford has decided to postpone $12 billion in planned investments for electric vehicle (EV) production and halt several key projects, such as the construction of a new battery factory in Kentucky. This decision came as the company expressed concerns that customers may not be willing to pay a premium for EVs, which they announced during their third-quarter earnings call.
Ford CFO John Lawler stated, “Given the dynamic electric vehicle (EV) landscape, we’re carefully adjusting our production and aligning future capacity with market demand.” He also mentioned, “In total, we’ve allocated approximately $12 billion toward EV initiatives, encompassing capital expenditures, direct investments, and expenses.” Ford emphasized its commitment to future EV models, with Lawler noting, “We’re not veering away from our second-generation EV products.” However, he added that they are evaluating the pace at which they’re investing in capacity and might delay some of those investments.
Following the release of the results, Lawler acknowledged that the shift to electric vehicles was in progress, yet conceded that the rate of adoption was not as swift as initially anticipated. Ford had previously declared the abandonment of its goal to produce two million EVs by 2026, aligning with a broader trend in the automotive industry toward a more cautious outlook on the future of electric vehicles.
Honda CEO Toshihiro Mibe informed Bloomberg that the company would no longer pursue the development of a budget-friendly electric vehicle, and General Motors has also revised its goal of manufacturing 500,000 electric vehicles by the first half of 2024.
In a recent conversation with The New York Times, Ford’s executive chairman, Bill Ford, pointed to elevated costs as the primary factor behind Ford’s deceleration in electric vehicle production.