Even early adopters and those trying to reduce their CO2 emissions2 emissions will fall when some electric vehicles have a 50 percent depreciation in the first year.
Automakers are also feeling the pressure. In a press release, Ford said it intends to expand customer choices as it “tailor[s]its all-electric vehicle rollout to deliver a capital-efficient, profitable electric vehicle business.” It also noted that Chinese automakers have “favorable cost structures, including vertical integration, low-cost engineering, advanced multi-energy battery technology and digital experiences.”
Ford is hoping to limit losses from its ambitious plan to launch an all-electric SUV by canceling production of the model and delaying the launch of its next-generation pickup truck.
“It comes back to understanding the customer, understanding how that will evolve over time,” Lawler said at a press briefing today. “It’s about providing them with a choice that meets their duty cycles and their needs, namely providing them with an option between full-battery electric vehicles and hybrid technologies.”
Future Fords Have to Make Money
Lawler, taking a hostage to fate, said Ford would not launch any future electric vehicles if they were not profitable within 12 months.
“We are bringing a range of electric vehicles to the European market this year,” Ford said in a statement, referring to the EU-only offering. Ford Explorer Electric and Capri built on the same platform borrowed from rival VW’s ID.4. “We are adjusting our vehicle roadmap in North America to offer a range of electrification options designed to accelerate customer adoption, including lower prices and longer range.”
Ford’s statement added that “dozens of new electric vehicle choices coming to market over the next 12 months and increasing compliance requirements” are causing pricing pressures. “These dynamics underscore the need for a globally competitive cost structure while selectively approaching customer and product segments to deliver profitable growth and capital efficiency,” the statement explained.
Amid the cost cuts, Ford is delaying the launch of the T3 midsize electric truck, considered a more advanced successor to the F-150 Lightning, until the second half of 2027. It had been scheduled to start production this year. The truck will be assembled at BlueOval City’s Tennessee Electric Vehicle Center. Ford also plans to introduce an all-new, all-electric commercial van, with production set to begin in 2026 in Ohio.
Lawler said Ford has “a number of hybrid technologies in development” and is working on other powertrain options. “We will continue to deliver petrol and diesel vehicles because the demand is there and will continue to be there,” he said.
“Our goal is to transform Ford into a high-growth, higher-margin, more capital-rich, efficient and sustainable company,” Lawler said.
He stressed that electric vehicles must be profitable. “And if they’re not profitable, depending on where the customer is in the market, we’ll change direction, we’ll adapt and we’ll make tough decisions, and that’s what we’ve done.”
Ford isn’t the only carmaker in pivot mode. General Motors and Honda he abandoned the plan co-create low-cost electric vehicles last year, with GM opting to focus on hybrids. VW of America also recently said that “a balanced approach is the best way to go.”