Ford‘s electric vehicle ambitions have hit some roadblocks, as reported by The New York Times. The automaker is facing challenges with its Mustang Mach-E and has cancelled plans for a three-row electric SUV.

Mach-E Troubles and Market Realities

The Mustang Mach-E, Ford’s all-electric SUV, is grappling with supply chain issues, compliance costs, and fierce price competition. These factors have put pressure on Ford’s EV strategy.

Three-Row SUV Plans Scrapped

In a significant move, Ford announced in August that it was abandoning plans for an all-electric three-row SUV. According to the American Institute for Economic Research, John Lawler, Ford’s vice chair and CFO, explained the decision:

“We’re seeing a tremendous amount of competition. In fact, S&P Global … said that there’s about 143 EVs in the pipeline right now for North America — and most of those are two-row and three-row SUVs.”

This cancellation reflects Ford’s reassessment of the EV market and consumer demand.

Manufacturing Shift

Just a month before the SUV cancellation, Ford had already signaled a change in direction. The company’s plant in Oakville, Ontario, originally slated for EV production, was repurposed to manufacture Ford’s gas-powered F-series pickups instead.

The Price Problem

One of the main hurdles for EV adoption is cost. Despite government subsidies, EVs typically cost $5,000 to $10,000 more than comparable gas-powered vehicles. Ashley Nunes, a senior research associate at Harvard Law School, noted in congressional testimony that the price gap is widening:

“EV prices aren’t just going up; they are rising faster than inflation…faster than [internal combustion engine] vehicle prices.”

Charging Infrastructure Lags

Another significant concern for potential EV buyers is charging. A 2023 survey found that 77% of Americans worry about how they’d charge an EV if they bought one. The nationwide charging network, while growing, still falls short of projections and consumer needs.

Ford’s Financial Struggle with EVs

Ford’s EV strategy has come at a significant cost. In 2023, the company reported losing about $40,525 per EV sold, totaling $4.7 billion in losses on EV sales for the year.

EVXL’s Take

Ford’s EV challenges reflect broader industry trends. Our recent coverage shows that Ford is rethinking its electric vehicle strategy, betting that hybrid technologies might be more appealing to family car buyers than full EVs. This shift comes amid concerns over high EV prices and range anxiety, highlighting the need for a more nuanced approach to electrification.

Furthermore, as reported in our latest article, Ford CEO Jim Farley’s recent trip to China has sparked a major EV strategy shift. The company is now exploring partnerships with Chinese suppliers to cut costs and shifting towards smaller, more affordable EVs. This move underscores the growing competitive pressure from Chinese automakers and the urgent need for established manufacturers to adapt.

These developments suggest that while the transition to electric vehicles continues, it’s clear that consumer adoption rates and infrastructure development aren’t matching initial projections. Ford’s strategy shift reflects a more pragmatic approach to EV integration, one that aligns with actual consumer demand and practical considerations while also addressing the competitive threat from emerging markets.

What are your thoughts on Ford’s EV strategy shift? Share your perspective in the comments below.