And just like that, the EV revolution is getting put on ice.
After making a huge deal about being all in on EVs, Ford is starting to sing a different tune and it might have to do with the need to actually make money. CEO Jim Farley has laid out a change in the Blue Oval’s approach to the future market, rolling back EV production significantly while leaning into commercial vehicles and pushing gas-electric hybrids to boost fleet fuel economy as a way to meet tightening government standards, as detailed out by Reuters.
That last part of the strategy was the very thing Toyota has been advocating for the industry for quite some time and yet has endured no shortage of criticism not only from EV enthusiasts but other automakers and many media outlets as it was cast as backwards and anti-progress. To see Ford suddenly do an about-face and go in the same direction is hilarious but also predictable.
The problem with Ford’s all-in strategy for EVs is that making all-electric cars just isn’t profitable. In fact, EVs have been a tremendous financial drain for the Dearborn-based automaker. In fact, Farley revealed that the anticipated full-year loss for its EV unit is about $4.5 billion or twice what was projected earlier. And just like that, the EV revolution is getting put on ice.
To put those losses in perspective, Ford says it’s lost on average $32,000 per EV sold. Honestly, that’s not as bad as some electric car losses suffered by other automakers. While many in the industry have been talking about rapidly moving toward full electrification, profits haven’t caught up with the blustery talk, and so harsh reality will result in automakers scaling back to a more sustainable crawl toward such visions.
Everyone is going to have their own spin on this shocking turn of events with Ford. The facts are commercial vehicles are the company’s bread and butter. EVs aren’t big money makers. Hybrids are far more practical and profitable. Ford is a business and it must turn a profit, so this is the way forward for now.
Images via Ford