Ford Motor Company has officially canceled its highly anticipated three-row electric SUV, dubbed the “personal bullet train,” in a significant pivot away from its aggressive electric vehicle (EV) strategy. This decision, reported by Reuters, marks a major shift in the automaker’s approach to electrification and reflects the challenges facing the EV market.

The Rise and Fall of Ford’s “Personal Bullet Train”

At an investor event in Dearborn, Michigan last year, Ford executives proudly unveiled plans for a three-row electric SUV, set to roll off assembly lines in 2025. Doug Field, Ford’s head of EVs and former executive at Apple and Tesla, described it as “a personal bullet train” that would be “beautiful and unlike anything in the segment.”

However, just fifteen months later, Ford has officially derailed this project. The company cited changing market conditions and slower-than-anticipated consumer adoption of battery-powered technology as reasons for the cancellation.

Shifting Gears: From EVs to Hybrids

Ford’s new strategy involves a pivot to hybrid three-row SUVs, one of the most prominent EV product pivots to date. This shift could cost the company up to $1.9 billion but is seen as necessary to align with current market demands.

Marin Gjaja, Ford’s chief operating officer for its EV division, explained the rationale behind the decision: “The reality is that the market changed. As we saw the growth and adoption rate fade, we were furiously trying to catch up.”

Financial Implications and Stock Performance

The cancellation of the three-row electric SUV represents a significant setback for Ford’s EV future. The company is now facing potential EV losses of up to $5.5 billion this year. Ford’s stock has fallen 25% from its July peak in 2024 and is down about 5% from the 2023 investor day.

Future Plans and Industry Trends

Despite the setback, Ford is not abandoning its EV ambitions entirely. The company plans to push back the launch of its new electric version of the F-150 truck until 2027, two years later than initially intended. Additionally, Ford will add an electric van to its future lineup, doubling down on its strengths in pickup trucks and commercial vehicles.

The automaker’s decision to shift into building three-row hybrid SUVs aligns with a broader industry trend. Many rivals are increasingly leaning towards hybrid technology as a bridge to full EVs.

Investor and Analyst Reactions

While the $1.9 billion hit from canceling the three-row SUV is significant, many analysts believe Ford made the right call. David Whiston, a Morningstar analyst, commented: “There’s no sense making what’s potentially already going to be a $1.9 billion hit an even bigger number by sticking with the vehicle even though you know you don’t have a path to profitability with it.”

EVXL’s Take

Ford’s decision to pivot away from its ambitious three-row electric SUV highlights the challenges automakers face in the rapidly evolving EV market. While this move may seem like a step back for EV enthusiasts, it reflects a pragmatic approach to balancing innovation with market realities. As we’ve seen in our coverage of other manufacturers like GM, adapting to changing consumer demands and market conditions is crucial for long-term success in the EV space.

Ford’s shift towards hybrid technology as a stepping stone to full electrification mirrors strategies we’ve observed in our recent articles about BMW et Porsche, suggesting a broader industry trend towards a more gradual transition to electric vehicles.

Photo courtesy of Ford Motor Company