Ford Cancels Three-Row Electric SUV and Delays F-150 Lightning Launch

Ford Motor Company declared on Wednesday that it is canceling its planned three-row electric SUV and delaying the release of a new electric version of its popular F-150 pickup truck.

The move is part of Ford’s broader effort to reduce costs and align its product offerings with current market demand.

Strategic Adjustments Amidst EV Market Challenges:

Amid growing concerns over the slower-than-expected adoption of electric vehicles (EVs), Ford, like other major automakers, is reevaluating its EV strategy. The company cited “pricing and margin compression” as key reasons for adjusting its product roadmap.

Ford’s Chief Financial Officer, John Lawler, emphasized that the company aims to achieve positive earnings before interest and tax (EBIT) within the first 12 months of launching new models.

Focus on Hybrids and Commercial Vehicles:

As part of its revised strategy, Ford is increasing its investment in hybrid vehicles, which combine an electric motor with a traditional gasoline engine. Hybrid sales have surged recently as consumers see them as a cost-effective alternative to fully electric vehicles.

Ford also plans to introduce a new electric mid-sized pickup and commercial van, building on its established strengths in these segments.

The launch of the next-generation F-150 Lightning electric truck has been postponed to the second half of 2027, a delay that Ford attributes to the need to leverage more affordable battery technology. The cancellation of the three-row electric SUV will result in a non-cash charge of approximately $400 million, with potential additional costs of up to $1.5 billion.

Shifting Capital Priorities:

Ford announced that it will reduce the portion of its annual capital spending dedicated to pure EVs from 40% to 30%. This shift reflects the company’s increased focus on hybrids and its intent to produce more affordable electric vehicles.

Ford’s CEO, Jim Farley, has pointed out that reducing the cost of EV production is crucial for the company’s long-term success, especially as competition from Chinese manufacturers and Tesla intensifies.

Battery Production and Future Plans:

In response to the U.S. Inflation Reduction Act (IRA), Ford is relocating some of its battery production to qualify for federal incentives and further reduce costs. The company will move battery production for its Mustang Mach-E from Poland to Holland, Michigan.

By 2025, it will begin producing batteries for its E-Transit van and a new electric commercial van in Kentucky and Tennessee.

Ford’s lithium iron phosphate (LFP) battery production is set to start in Michigan in 2026, benefiting from IRA incentives. Despite criticism, Ford’s licensing agreement with Chinese company CATL for LFP battery technology remains unchanged.

Looking Ahead:

Ford plans to provide a comprehensive update on its electrification strategy, including technology, profitability, and capital requirements, in the first half of 2025.

The company’s shift towards hybrid vehicles and affordable EVs represents a significant strategic pivot as it navigates the evolving automotive market.