Ford workers produce an electric F-150 Lightning pickup at the automaker’s Ford Rouge Electric Vehicle Center (REVC) on December 13, 2022.Thank you for reading this post, don't forget to subscribe!
Michael Wayland | cnbc
As a result, it is postponing about $12 billion in planned spending on new EV manufacturing capacity.
Customers’ reluctance to pay extra for EVs has complicated Ford’s ambitious and expensive plans to rapidly increase production of those vehicles. While Ford’s – and the industry’s – EV sales are growing, they are not growing at the pace Ford had hoped.
Ford executives emphasized that the company is not cutting its spending on future electric vehicle models. But it now plans to expand its EV manufacturing capacity and its spending on that capacity more slowly than previously planned.
“We are not moving away from our second generation [EV] Products,” CFO John Lawler said at a media briefing Thursday. ”However, we are seeing momentum in the capacity that we are installing. “We’re going to take some of that investment out.”
Ford Motor said Thursday that many customers in North America are no longer willing to pay a premium for an electric vehicle compared to an internal combustion or hybrid alternative.
Lawler said Ford will postpone about $12 billion in planned spending on manufacturing capacity for EVs, That includes a planned second battery plant at a new campus in Kentucky. But, he said, construction of Blue Oval City – Ford’s new EV manufacturing complex in Tennessee – will continue as originally planned.
“The customer will decide what the volume is,” Lawler said. “Ford is able to balance production of gas, hybrid and electric vehicles to match the pace of EV adoption in a way that others cannot.”
As part of its third-quarter earnings report, Ford said Thursday that its electric-vehicle business unit, called the Ford Model E, lost $1.3 billion on an operating basis in the period. Despite a 26% increase in revenue, this is almost double its loss from the year before.
Through the first three quarters of 2023, Model E reported an operating loss of approximately $3.1 billion, which was in line with Ford’s previous guidance, which called for a full-year operating loss of $4.5 billion for the Model E business unit Was.
Ford withdrew all of its 2023 guidance on Thursday in light of its tentative agreement with the United Auto Workers labor union.