Ford workers build the electric F-150 Lightning pickup truck at the automaker’s Ford Rouge Electric Vehicle Center (REVC) on December 13, 2022.
Mike Welland | CNBC
As a result, it has delayed about $12 billion in planned spending on new electric vehicle manufacturing capacity.
Customers are unwilling to pay extra for electric vehicles, complicating Ford’s ambitious and costly plan to significantly increase production of electric vehicles. While electric vehicle sales at Ford and across the industry are growing, they are not growing at the rate Ford expected.
Ford executives emphasized that the company will not cut spending on future electric vehicle models. But it now plans to ramp up its electric vehicle manufacturing capacity and spending on that capacity more slowly than previously planned.
“We are not giving up on second-generation (EV) products,” Chief Financial Officer John Lawler said at a media briefing on Thursday. “However, we are considering how quickly we bring capacity in. We will unwind some of that investment.”
Ford Many customers in North America are no longer willing to pay more for electric vehicles than for models with internal combustion engines or hybrids, the automaker said on Thursday.
Lawler said Ford will defer about $12 billion in planned spending on electric vehicle manufacturing capacity. But he noted that construction on the Blue Oval, Ford’s new electric vehicle manufacturing campus in Tennessee, will continue as planned.
“The customer will decide what the quantity is,” Lawler said. “Ford is able to balance production of gasoline, hybrid and electric vehicles to keep up with EV adoption like no other company.”
As part of its third-quarter earnings report, Ford said Thursday that its electric vehicle unit, the Ford Model e, had an operating loss of $1.3 billion during the period. Although revenue grew 26%, losses were roughly double the same period last year.
Model e’s operating loss through the first three quarters of 2023 is about $3.1 billion, in line with Ford’s previous guidance of a full-year operating loss of $4.5 billion for the Model e business unit.
Ford on Thursday withdrew its entire 2023 guidance in light of the tentative agreement with the United Auto Workers union.
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