Billions written off: Ford cancels large electric SUV

Ford is bowing to the weak market for electric cars and will not be building a battery-powered SUV with three rows of seats. This is one of the changes to the planned vehicle range for the US market that the car manufacturer announced on Tuesday. The company is also scaling back its investments in electric vehicles.

In 2023, Ford announced the market launch of the electric family SUV with three rows of seats for 2025. One year later, the planned market launch was postponed to 2027. Now comes the end, which will cost Ford the equivalent of up to 1.7 billion euros.

Billions written off

The car manufacturer is writing off 400 million US dollars directly on product-specific equipment and materials. In addition, Ford expects further write-downs and costs of up to 1.5 billion US dollars in the coming quarters.

Ford CEO Jim Farley told the financial service Bloomberg that he was very pleased with the planned electric SUV, "but there was simply no way it could fulfill our claim to profitability".

In an all-electric vehicle, the battery pack is the main cost factor, according to the statement. Ford intends to offer the next three-row family SUVs with hybrid drive.

Ford is making high losses in its electric car division quarter after quarter, while the combustion models and the commercial vehicle division are earning money. The manufacturer is therefore drawing fundamental consequences: Capital expenditure on electric models will be cut from the previous 40 percent of the annual budget to 30 percent.

Profitability is a must

In the future, every new model should be in the black in the first twelve months, emphasized CFO John Lawler at the announcement. The priority for the electric models is now a delivery van, which is due to go into production in 2026, and a medium-sized pickup planned for 2027.

The successor model to the large F-150 Lightning electric pickup is not due to be launched until the end of 2027 instead of 2025. Ford is then hoping for cost savings through cheaper battery technology. Meanwhile, the company also wants to reorganize the purchasing of batteries and hopes to gain cost advantages as a result.

In the medium term, Ford hopes to offer electric cars that can compete with combustion engines in terms of price. "An affordable electric vehicle starts with an affordable battery," said Farley. "If you're not competitive on battery cost, you're not competitive."

The market for battery electric vehicles is developing very dynamically, Ford continued. Competitors from China could score points with lower development and production costs, as well as advanced battery technology.

(vbr)