What happens when you rush pell mell into manufacturing vehicles only a small number of people actually want?
Ford is reassessing its EV plans, including vertical battery integration
Ford Motoris rethinking its electric vehicle strategies, including “reassessing” the need for in-house production of batteries, CEO Jim Farley said Tuesday.
The Detroit automaker previously confirmed plans to delay or cut $12 billion in spending on all-electric vehicles, but the comments made Tuesday are the most detailed about Ford’s changing plans for EVs, sales of which are growing at a slower-than-expected rate.
“One of the things we’re taking advantage of in taking some timing delays is rationalizing the level and timing of our battery capacity to match demand and actually reassessing the vertical integration that we’re relying on, and betting on new chemistries and capacities,” Farley said during the automaker’s fourth-quarter earnings call.
Farley reiterated the company still believes EVs will grow, but noted widespread adoption for mass-market consumers won’t happen until the costs are more in line with traditional vehicles. EVs are typically thousands of dollars more expensive than their gas-powered counterparts.
Even if they were in line with fossil fueled vehicles, people will still opt out. They do not want vehicles which do not go very far, take a long time to charge, and have a higher auto insurance cost, hence why the low cost ones are not selling well either. Heck, people still opt out of hybrids because of the cost/benefit.
Overall, Ford did make money, however
The company’s EV business, known as Model e, lost $4.7 billion last year, including $1.57 billion during the fourth quarter of 2023, offset by profits in the company’s fleet and traditional internal combustion engine units. Both businesses earned more than $7 billion each last year.
What’s selling? Fossil fueled trucks and SUVs. Not EVs.
As Ford pulls back and reevaluates the EV business, it intends to lean in on sales of hybrid vehicles, specifically trucks. The company expects its hybrid sales to increase 40% this year. It sold 133,743 hybrid vehicles in the U.S. in 2023.
That makes more sense. But, will those who want big trucks want hybrids?
Auto companies are learning that the market dictates what people want, not the companies.
Read: Ford Reassess Their EV Strategy »