Ford Motor is reevaluating its electric vehicle strategies after previously saying it would postpone $12 billion in spending on all-electric vehicles. EVs sales have increased more slowly than expected, and while CEO Jim Farley says sales will grow, he believes widespread adoption won’t come until EVs have similar costs to traditional vehicles.
The company will also reassess whether there is a need for vertical integration of batteries, Farley said. “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.”
Finally, the company will consider making changes to installed production capacity as it assesses demand, and it might delay next-generation EVs “to ensure they meet our criteria for profitability, given the new market reality,” said Ford Chief Financial Officer John Lawler. The company is pulling back from a previously announced goal of an 8 percent margin for its EV unit by 2026. It had expected to sell 2 million vehicles per year by then.
In the meantime, the company will shift focus to hybrid trucks and other vehicles, and it expects hybrid sales to increase 40 percent this year after selling 133,743 hybrid vehicles in the U.S. last year.
