DETROIT – Ford Engine is delaying production of a next-generation all-electric pickup truck at a new plant in Tennessee and canceling plans for a three-row electric SUV, the company said Wednesday.
Instead, Ford said it will prioritize the development of hybrid models as well as electric commercial vehicles, such as a new electric commercial van in 2026, followed by two electric pickup trucks in 2027.
The pickups are expected to include a full-size pickup, which will be produced in 2027 at the Tennessee plant currently under construction, and a new mid-size pickup being developed by a specialized “skunkworks” team in California.
“As we've learned in the marketplace and seen where people have gone, we're going to focus on where we have a competitive advantage, and that's in commercial trucks and SUVs,” Ford Chief Financial Officer John Lawler said Wednesday.
The moves are aimed at improving the profitability and efficient use of capital in the electric vehicle business, said Lawler, who is also a vice president at the automaker. But in the short term, they will cost the company money.
Ford said it will incur a non-cash special charge of about $400 million for the write-down of certain product-specific manufacturing assets, including the write-off of the three-row SUV.
Ford Mustang Mach-E and F-150 Lightning on display at the New York International Auto Show on March 28, 2024.
Danielle DeVries | CNBC
The company said the changes could also result in additional expenses and cash outlays of up to $1.5 billion. Ford will reflect these in the quarter in which they are incurred as a special item.
Lawler said the company's future capital investment plans will shift from spending about 40% on all-electric vehicles to spending 30%. He did not give a timeline for the shift.
Vehicle production at the new $5.6 billion Tennessee plant was initially expected to begin next year. The company said it still expects to begin battery cell production at the plant in 2025.
The changes are the latest for Ford and come at a time when adoption of electric vehicles is slower than expected and automakers are unable to produce them profitably.
The new plans come about five months after Ford said it would delay production of the next-generation three-row SUV and pickup truck, code-named “T3.”
“It's really about us being agile and listening to our customers' responses,” Lawler said during a call Wednesday morning. “We've been on the [EV] “We've been in the market here for over two years and we've learned a lot. What we're realizing is that customers want more electrification options.”
The rollout of Ford's next generation of electric vehicles will begin with a commercial van to be assembled at Ford's Ohio Assembly Plant starting in 2026, according to the company.
The automaker had previously said it wouldn't launch a vehicle if there wasn't a clear path to profitability within the first year. It was a shift from selling electric vehicles at a loss to boost share and help meet fuel and emissions standards.
Ford said it will continue to produce and update its current all-electric vehicles, such as the Ford Mustang Mach-E crossover and F-150 Lightning pickup truck.
The company said it plans to provide investors with an “update on electrification, technology, profitability and capital requirements” in the first half of 2025.
