Just last year, Ford Motor Co.'s strategy for electric vehicles seemed clear: quickly ramp up production of popular early offerings while launching second-generation models like a three-row crossover and a full-size pickup truck — and, most important, make money doing it.
Today, that part of Ford's business is sinking deeper into the red; two-thirds of the jobs at the Detroit-area plant that makes the F-150 Lightning have been cut; the three-row crossover is dead; and the automaker's next consumer-focused electric vehicles won't hit dealer showrooms for at least three years.
Ford says its U.S. electric-vehicle sales have grown 64 percent this year through July. But stubbornly high costs, increased competition and uneven customer demand are forcing a rapid shift to smaller, more affordable products. Executives say they have been unable to find a way to make larger vehicles profitable in the first year — an unwavering mandate from CEO Jim Farley — and that the company will cut its spending on all-electric powertrains by 25 percent.
Ford will now focus its efforts on hybrids, as well as a flexible EV platform it will use to introduce a midsize pickup truck in 2027. The platform, developed in California under the direction of former Tesla engineers, is also expected to underpin small electric crossovers.
The company has delayed production of its next-generation full-size pickup truck for the second time this year, this time until late 2027.
The changes highlight the challenges Ford and its rivals face during a difficult transition, forcing many to adjust course faster than expected.
“Overall, the EV journey has been challenging, but it has forced us as a company to become even more prepared, including applying it to our internal combustion engine business, and that will pay off in the long run,” Farley said on Ford's July earnings call.
However, the carmaker believes it has the right product range to suit the evolving market.
“I think there’s no question that electric vehicles will ultimately dominate,” Darren Palmer, Ford’s vice president of electric vehicle programs, said in an interview on Aug. 16, before the strategy shift was announced. “Exactly when and how much that will be. We’re adjusting a little bit because [sales] “It's a little slower than you might think, and there are a couple of classes of cars that are popping up a little bit more. We're making sure that we're viable, that we have a good business, and that we have money to reinvest as we go through this.”
The flexible platform on which Ford is pinning its electric vehicle hopes was developed by a team formed in 2022 under the leadership of Alan Clark, who joined Ford from Tesla that same year.
The midsize pickup will be the first in an expected line of electric models priced under $40,000.
“We’re developing a super-efficient platform using innovation in our product development, supply chain and manufacturing teams,” Farley said in July. “Without an engine or transmission, a smaller vehicle could have a much more spacious package, in fact a higher-class interior package, with a smaller silhouette. That’s a big advantage for customers compared to the ICE. And we’re focusing on very differentiated vehicles, priced under $40,000 or even $30,000. And we’re going to focus on two segments: work and adventure.”
At a meeting in Las Vegas this month, Ford shared several digital renderings with dealers meant to demonstrate the platform’s flexibility. Participants said the examples included sedan, crossover and pickup body styles in a mix of four- and six-seat configurations as the company explained how having a range of products could help reduce production costs.
One attendee at the event said officials had touted the idea of integrating the battery pack into the car's chassis, an idea previously floated by Tesla and adopted by companies such as BYD.
Beyond the flexible platform, Ford is still relying heavily on its full-size electric pickup truck, now scheduled for the second half of 2027, which Farley says will require far fewer parts to build and will have a “stunning” aerodynamic design. A commercial van, which sources say they expect to be the larger, next-generation E-Transit, is scheduled for 2026.
In July, Farley said the company would be “very cautious” about bringing larger electric vehicles to market.
“For us, they will be part of the bigger picture, but to be successful, we need a much bigger breakthrough in terms of cost efficiency, a much smarter choice of segments – in our case, labor and commercial – a lot of partnerships and a lot of technology paths,” he said.
Ford's change of course will come at a cost.
The automaker said on Aug. 21 that such a shift could cost $1.9 billion, including $400 million in non-cash costs related to canceling three-row electric crossovers it most recently planned to build at its Oakville, Ontario, assembly plant.
Wall Street investors remained optimistic despite a short-term profit squeeze.
“While costs and potential cost increases and [capital expenditures] “The changes resulting from Ford's announcement are significant and easily offset by its strong financial profile, while the company's credit ratings will not be impacted,” Morningstar DBRS analysts wrote in an investment note.
John Murphy, an analyst at Bank of America Securities, said the flexible EV platform will help Ford lower the cost curve for EVs and increase the share of software services, given that vehicles will be designed to integrate such digital capabilities.
“Recent quality and launch issues have been subpar and should be corrected,” Murphy wrote in a note to investors. “However, close attention to product cadence and practical opportunities to capture additional profits should allow Ford to structurally increase profits.”