As recently as last year, Ford Motor Co.’s electric-vehicle strategy seemed clear: Rapidly expand production of early blockbuster models while also rolling out second-generation models like a three-row crossover and a full-size pickup truck — and, more important, make money doing it.
Today, that part of Ford’s business is falling further into the red; two-thirds of the jobs at the Detroit-area plant that makes the F-150 Lightning have been cut; the three-row crossover is dead; and the automaker’s next consumer-oriented electric vehicles won’t hit dealerships for at least another three years.
Ford says its U.S. electric vehicle sales are up 64% this year through July. But stubbornly high costs, increased competition and uneven customer demand are forcing a rapid shift to smaller, more affordable products. Executives say they have failed to find a way to make larger vehicles profitable within the first year — a nonnegotiable mandate from CEO Jim Farley — and that the company will cut its spending on all-electric powertrains by 25%.
Ford will now focus its efforts on hybrids, as well as a flexible EV platform that it will use to launch a midsize pickup truck in 2027. The platform, developed in California under the leadership of former Tesla engineers, is also expected to underpin small electric crossovers.
The company has delayed production of its next-generation full-size pickup truck for the second time this year, now to late 2027.
The changes underscore the difficulties Ford and its competitors face in a complicated transition that is prompting many to correct course more quickly than expected.
“Overall, the EV journey has been rewarding, but it has forced us to become even more fit as a company, including applying that to our internal combustion engine business, and that will pay off in the long run,” Farley said on Ford’s July earnings call.
Still, the automaker believes it has the right product mix for market development.
“In my opinion, there is absolutely no doubt that eventually EVs will be mainstream,” Darren Palmer, Ford’s vice president of EV programs, said in an interview on August 16, before the strategy shift was announced. “Exactly when and how much remains to be seen. We are adjusting a little bit because [sales] are a little slower than you might think, and there are some classes of cars that are emerging a little bit more. We’re making sure we’re viable, we have a good business, and we have money to reinvest as we go through this.”
The flexible platform on which Ford is pinning its electric vehicle hopes was developed by a team formed in 2022 by Alan Clarke, who joined Ford from Tesla that year.
The midsize pickup will be the first in an expected range of electric models under $40,000.
“We’re designing a super-efficient platform, leveraging innovation across our product development, supply chain and manufacturing teams,” Farley said in July. “Without an engine or transmission, a smaller vehicle could have a much more spacious package, in fact, the interior package of a class above, with a small silhouette. That’s a big advantage for customers over ICE. And we’re focusing on very differentiated vehicles, priced under $40,000 or even $30,000. And we’re going to focus on two segments: work and adventure.”
Ford shared with dealers at a meeting this month in Las Vegas a handful of digital renderings meant to showcase the platform’s flexibility. Attendees said the examples included what appeared to be sedan, crossover and pickup truck body styles in a mix of four- and six-seat configurations, as the company explained how having a range of products could help reduce production costs.
One attendee said officials praised how the battery would be integrated into the vehicle’s chassis, an idea previously floated by Tesla and adopted by companies including BYD.
In addition to the flexible platform, Ford is still counting heavily on its full-size electric pickup truck, now scheduled for the second half of 2027, which Farley said will require far fewer parts to build and have an “incredible” aerodynamic design. A commercial van, which sources said they hope will be the next generation of the large E-Transit, is scheduled for 2026.
Farley said in July that the company would be “very careful” about how it brings larger electric vehicles to market.
“For us, they will be part of the scenario, but success requires even more advances in cost efficiency, much smarter choices in segments — in our case, work and commercial —, many partnerships and many technological paths,” he said.
Ford’s change of direction will be costly.
On Aug. 21, the automaker said the move could cost up to $1.9 billion, including a $400 million non-cash expense related to canceling three-row electric crossovers it had recently planned to build at its Oakville, Ontario, assembly plant.
Wall Street investors remained optimistic despite the short-term earnings squeeze.
“Although fees and potential expense increases and [capital expenditures] arising from Ford’s announcement are significant, they remain readily absorbed by its strong financial profile, with the company’s credit ratings unchanged,” Morningstar DBRS analysts wrote in an investor note.
Bank of America Securities analyst John Murphy said the flexible EV platform will help Ford flatten the cost curve of EVs and increase its share of software services, as vehicles will be designed to integrate these digital features.
“Recent launch quality and execution issues have been less than stellar and need to be remedied,” Murphy wrote in an investor note. “However, a sharp focus on product cadence and practical incremental profit opportunities should position Ford to grow profits structurally.”