Back in March 2022, Ford announced that it would be investing a massive $50 billion into all-electric vehicles and related technology by 2026, vastly expanding its portfolio in that regard along the way. Thus far, it has sunk considerable funds of its own and those collected via government assistance into multiple future EV and battery plants, including BlueOval City in Tennessee, BlueOvalSK Battery Park in Kentucky, and BlueOval Battery Park Michigan in the town of Marshall. However, in recent months – and with the UAW strike just ending after around six weeks – the automaker is slowly rolling back some of these investments, as Ford CFO John Lawler touched on during the automaker’s Q3 earnings call this week.
“For example, we have taken out some Mustang Mach-E production, and we are also slowing down several investments including making a decision with SK On to delay the second BlueOval SK JV bettery plant in Kentucky,” Lawler said. “And we have also said we are evaluating our BlueOval Battery Park Michigan plant to determine the best path forward. In fact, all told, we have pushed about $12 billion of EV spend, which includes CapEx, direct investment, and expense.”
The signs of this pullback actually began back in early August, when Ford announced that it was pushing back plans to build 600k EVs annually by 2024 and two million by 2026, all while offering discounts on its existing EV models as demand wanes and inventory builds up. As for what’s causing this to happen, both Ford CEO Jim Farley and chairman Bill Ford have both blamed divisive politics for slowing EV adoption, along with high prices.
Of course, Ford isn’t alone in this shift, as its cross-town rival, General Motors, is also having problems with EV production and sales that recently prompted it to nix its plans of producing 400k units by mid-2024. Additionally, GM is proving to be a bit of a thorn in Ford’s side as the latter company works to produce lithium-iron phosphate (LFP) batteries at BlueOval Battery Park Michigan using technology licensed from China-based CATL, which has drawn considerable scrutiny from lawmakers as of late.
We’ll have more on Ford’s future EV investments soon, so be sure and subscribe to Ford Authority for 24/7 Ford news coverage.
Comments
Excellent!
Makes perfect sense and quite frankly, expected. To quote Farley himself when they decided to focus on trucks and suv’s: “We make / sell what people buy”
I would not be surprised to see BOC and the Marshall battery plant scaled back or cancelled.
“Politics” is the scapegoat for a really bad business decision by Mr. Farley. The EV ecosystem shortcomings were/are obvious. How could a company like Ford–that is full of engineers–not be able to figure this out? The EV debacle has been about one thing–pushing the Green New Deal (i.e. the Inflation Reduction Act) through Congress so all the little piggies could feed at the taxpayer trough. Note how, even on this site, all the EV cheerleaders disappeared after the IRA got passed. Were they ever real proponents of EVs, or were they just paid lobbyists?
What David said. As the saying goes, one swallow does not make a spring. They got the low hanging fruit and then ran up against the reality that the vast majority of ordinary folks will wait for the bugs to be worked out and a robust infrastructure built before going EV
“Ford-that is full of engineers”. It looks like you do not have a clear understanding of what is the role of the engineers and managers in a company like Ford. You can google “A man in a balloon” story which explains clearly the way the things are in a large organization.
You sleep with dogs you get fleas. Jumping in bed with Biden and Newsome got them some money, but now they’ll be faced with unrealistic fuel efficiency mandates that will cost the company and consumers billions and probably a lot of workers their jobs. This idiot cannot be voted out of office fast enough.
It looks like you have it all figured out. Too bad that all the other people involved in this mess cannot see as clearly as you do.
Demand for EVs is still high. Its just not as robust as last year. So, dealers have some inventory on their lots now. Gee, how many ICE vehicles are on dealer lots. Not sure why folks are making such a big deal out of the dealer model. Dealers always have inventory on their lots except during the pandemic. Now things are getting back to normal. That said, the market should determine what vehicle we buy. IF the big three do not scale ev production, Tesla will continue to dominate the EV market. Interestingly, Tesla’s share of the market is down to 50% due to all of the other manufacturers rolling out their own models. Wouldn’t Ford or GM like to have 50% of any market today!
Just a quick reference from actual facts on ICE vehicles vs the Mach e in days inventory: Mach e sits at 214 days inventory, F-series truck at 117, Maverick 22, Bronco 41. Quite a difference. So yeah, ICE inventory is turning from almost 2x faster to almost 10X faster. Just the “Inconvenient” facts.
Just remember the “inconvenient” facts when electric vehicle prices go down and demand goes back up.
Finally, someone in Ford woke up and saw the writing on the wall. What stat did I see this morning – average days of supply for electric vehicle 97 average days of supply for ICE
vehicles 60 something. People don’t want electric vehicles. Winter is coming. Here in Ohio and all across the upper tier of America where is gets cold in the winter all electric cars are
not up to par in the Winter. Oh, and don’t run that heater to stay warm or the defroster to melt the snow and ice on the rear and front windows.
They should have done their due diligence FIRST!!!
All I know is that it took fourteen months to get my 2022 Maverick. Why the industry and the government went from all fossil fuel to all EVs is a head scratcher. The market wants a transition and hybrids are the answer. I get 50 mpg in city and overall 42. Transition to a combination of plug in and braking batteries with gasoline as a backup.