Ford adjusts to new EV market reality with slew of changes

Ch-ch-ch-changes: Ford announced a slew of them Monday in response to a very different EV market than the one executives expected to materialize by now.

To name a few: The automaker is nixing large EVs that have proven difficult to make profitable in the US, instead investing in extended range electric vehicle (EREV) tech, ramping up its lineup of hybrids, and getting into the stationary energy storage business.

“This is a customer-driven shift to create a stronger, more resilient, and more profitable Ford,” CEO Jim Farley said in a statement. “The operating reality has changed, and we are redeploying capital into higher-return growth opportunities: Ford Pro, our market-leading trucks and vans, hybrids, and high-margin opportunities like our new battery energy storage business.”

The announcement marks another pivot for Ford, following repeated moves by the automaker to adjust its EV strategy amid market changes. Earlier this year, the company announced plans to launch a new, affordable midsize electric truck in 2027, revealed a new vehicle platform that will underpin its next-gen EVs, and unveiled a new manufacturing process that it said would yield major efficiencies.

“Ford is following the customer. We are looking at the market as it is today, not just as everyone predicted it to be five years ago,” Andrew Frick, president of Ford Blue and Ford Model e, said during a news conference. “The American consumer is speaking clearly, and they want the benefits of electrification like instant torque and mobile power, but they also demand affordability, range confidence, vehicles that match their duty cycle, and the freedom to choose the powertrain that fits their life and their work.”

Goodbye BEV, hello EREV: Ford is discontinuing production of the pure battery-electric version of its F-150 Lightning truck and preparing to launch an EREV version at an undisclosed date.

EREVs, which feature electric powertrains and gas-powered generators that recharge the battery, are popular in China but have yet to take off in the US or garner much awareness from US consumers. Stellantis’s Ram brand has also announced plans to introduce an EREV in the US.

The next-gen F-150 Lightning EREV will have an estimated range of more than 700 miles, according to Ford.

Going stationary: Ford’s planned foray into the stationary energy storage business will leverage the LFP battery tech Ford has licensed from battery manufacturer CATL, using a Ford battery plant in Kentucky that it’ll convert to support the plan. According to a news release, the factory will produce “LFP prismatic cells, battery energy storage system modules, and 20-foot DC container systems” for “data centers, utilities, and large-scale industrial and commercial customers.” A plant in Marshall, Michigan, will be able to flex between production for automotive and stationary energy storage customers, according to execs.

“Instead of letting capacity sit idle because of the pace of EV adoption, we are going to use it to power data centers, the electric grid, and much more,” Frick said. “This is a compelling opportunity. It’s a market with huge potential and strong demand.”

Optionality: Ford executives now expect half of the company’s global volume to be made up of hybrids, EREVs, and EVs by 2030, versus just 17% today.

Some of the changes are geared toward supporting additional production of gas-powered models, as well, including plans to build new truck models at a plant in Tennessee that previously was dedicated to EVs.

“We want to be very clear: This plan creates jobs,” Frick said. “We plan to hire thousands of people across America over the next few years, reinforcing our position as the top employer of US hourly autoworkers.”

Execs said these moves would give Ford’s EV business a path to profitability by 2029 and improve profitability across its other business lines.

“We took a look at the entire landscape and obviously saw a notable, more recent change,” Frick said. “So we’ve been working on a plan to strategically redeploy the capital and resources to build a more profitable and more durable business and play to our strengths.”