Ford's Big Shift: From EVs to Hybrids and Energy Storage
A Strategic Pivot After Significant Losses
Ford has announced a major shift in its electric vehicle (EV) strategy, focusing more on hybrids and energy storage solutions. This change comes after the company faced substantial losses in its EV business.
Financial Struggles and Market Challenges
- EV Division Losses: Ford's EV division, Ford Model e, lost over $12 billion in the last two years.
- Sales Decline: EV sales dropped by more than 60 percent in November.
Future Plans and Financial Commitments
Ford aims to make hybrids a significant part of its future lineup. By 2030, the company wants half of its global sales to come from hybrids, extended-range electric vehicles (EREVs), and smaller, more affordable EVs. This shift is expected to help the company become profitable again by 2029.
Investment and Workforce Changes
- Financial Investment: Ford expects to spend $19.5 billion in 2025 and another $5.5 billion in cash effects by 2027.
- Workforce Adjustments: Ford recently ended its partnership with South Korean battery maker SK On, leading to the loss of at least 1,600 jobs. However, the company plans to add around 2,100 new jobs over time.
New F-150 Lightning Truck
Ford is developing a new version of its F-150 Lightning truck, featuring an extended range of up to 700 miles on a single charge. This new model will include a small internal combustion engine to recharge the battery, addressing range anxiety and towing capacity issues that plagued the first version.
Market Response and Challenges
- Original Model's Performance: The original F-150 Lightning did not sell as well as expected due to high prices, heavy battery weight, and range concerns.
- Federal EV Tax Credit: The elimination of the $7,500 federal EV tax credit also impacted sales.
Energy Storage Initiatives
Ford is exploring energy storage as a way to utilize its previous EV investments. The company plans to use its prismatic lithium iron phosphate (LFP) batteries for energy storage systems, which can power data centers and other commercial uses. This move is seen as a natural next step for the company.
