Ford announces postponement of US$12 billion electric vehicle investment plan, adjusts electric strategy

According to news on October 27, Ford announced that it will postpone its electric vehicle investment plan worth a total of US$12 billion, including its agreement with SK The second battery factory built in cooperation with On. The decision came after Ford Chief Financial Officer John Lawler emphasized during the earnings call that Ford would not exit the field of electric vehicles.

Lawler and CEO Jim Farley acknowledged that despite growing sales of electric vehicles, consumers have become less price elastic and most are unwilling to pay for electric vehicles Paying higher prices creates competitive price pressures that could squeeze margins and limit the growth of Ford's electric vehicle business.

According to the third quarter 2023 financial report, Ford’s electric vehicle division’s revenue reached US$18 billion, while total sales of pure electric vehicles reached 48,000 units, setting the best sales performance in a year and a half. However, the company also announced a record loss, underscoring the challenges it faces as it ramps up production without turning a profit.

To address these challenges, Ford is shifting its electric vehicle strategy from feature-focused development to prioritizing cost efficiency. Under this cost-oriented strategy, Ford is reviewing its electric vehicle portfolio to better meet market demand. This includes reducing production lines for certain models and suspending SK's operations in Kentucky. On joint battery factory projects and aligning other electric vehicle-related investments. It is understood that this strategic adjustment is expected to enable Ford to better adapt to the new pattern of the electric vehicle market.

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