Ford Motor Company announced that it is pulling back on its electric SUV, citing profitability concerns.
Its all-electric three-row SUV has low consumer demand, according to the company, although Ford has received billions of dollars in tax incentives to increase EV production.
Instead of an all-electric SUV, it will feature hybrid technology.
Ford President and CEO Jim Farley said the company is “committed to innovating in America, creating jobs and delivering incredible new electric and hybrid vehicles that make a real difference in CO2 reduction.”
“We learned a lot as the No. 2 U.S. electric vehicle brand about what customers want and value, and what it takes to match the best in the world with cost-efficient design, and we have built a plan that gives our customers maximum choice and plays to our strengths.”
“We loved our three-row crossover and I was so excited to show everyone the work we did,” Farley explained to Bloomberg. “But there was just no way it would ever meet our criteria of being profitable.”
“An important enabler to achieving that profitability is around the mix of the battery production that’s in the US that’s going to qualify for the advanced manufacturing tax credit,” Ford’s Chief Financial Officer John Lawler said. “That’s going to be a big part of our walk to profitability.”
As a result of the shift to hybrid technology for the vehicle, the “company will take a special non-cash charge of about $400 million for the write-down of certain product-specific manufacturing assets for the previously planned all-electric three-row SUVs, which Ford will no longer produce,” Ford explained in a news release.
“These actions may also result in additional expenses and cash expenditures of up to $1.5 billion and the company will reflect those in the quarter in which they are incurred, as a special item,” the release added.
The decision to shift to hybrid SUVs comes one year after the Biden administration announced a conditional commitment to loan $9.2 billion for three Ford and Lincoln EV manufacturing plants
An April report found that Ford lost more than $100,000 for each electric vehicle it sold.
Net losses for the first quarter of fiscal year 2024 were $1.3 billion, according to CNN.
The figure totals a $132,000 loss for every EV sold during the first quarter.
“Americans don’t want EVs at levels Biden’s climate hysteria require,” wrote businessman Andy Pruzder. “Ford’s EV Q1 losses soared to $1.3 billion – a ridiculous $132,000 per EV sold. All Ford’s profits came from combustion engine vehicle sales. Collectivist policies destroy prosperity.”
