Rising demand for hybrids and increased price pressure in the electric vehicle segment have prompted Ford to change its electrification plans.
The automaker announced Wednesday that it has canceled production of an electric SUV with three rows of seats that was originally scheduled to launch in 2025 and would have a range of up to 350 miles. It said it had already invested $400 million in the project and the final cost of its revised product plan could be as high as $1.5 billion. The automaker also said it would reduce its investment in electric vehicles to 30% from the current 40% of annual capital expenditures.
Instead of the three-row electric SUV, Ford said it will focus on a new family of three-row SUVs with hybrid technology. The automaker also hinted at a hybrid option for its next-generation F-Series Super Duty pickup, which the automaker said will offer a range of powertrain options. Ford said hybrid technology makes sense for its largest vehicles because battery costs remain a challenge in those segments.
The automaker is sticking with electric vehicles and has announced a new low-cost electric vehicle platform that will underpin multiple vehicles in both the passenger and commercial vehicle segments. The first vehicle on this platform will be a mid-size pickup truck, scheduled to launch in 2027.
Overview of the electric Ford F-Series from the Ford Capital Market Day presentation via Mike Levine on Twitter
Also due in 2027 is Ford’s hotly anticipated successor to the F-150 Lightning. The new electric full-size truck, codenamed Project T3, was originally scheduled to launch in 2025, but Ford said Wednesday that delaying the launch will allow the company to take advantage of lower-cost battery options while giving the market more time to adapt to electric vehicles. Production will take place in Tennessee, where preparations are already underway.
In addition, production of an electric delivery van is planned for 2026 and will be manufactured in Ohio.
Ford said Wednesday that it is also taking steps to reduce battery costs. One measure is to manufacture cheaper lithium iron phosphate batteries in the U.S., which means they will be eligible for the Inflation Reduction Act tax credit. Another is to move battery production for the Mustang Mach-E from Poland to the U.S., which should also make the batteries eligible for the Inflation Reduction Act tax credit.
An update on Ford’s electrification plans will be provided in the first half of 2025, the automaker said.
