Ford faces £1.5bn hit as it cancels electric SUV project
Ford has unveiled a £1.5bn hit from its decision to cancel a new electric SUV as it says motorists are unwilling to pay higher prices to switch away from petrol and diesel.
The Detroit powerhouse said on Wednesday it was watering down its electric car plans by focusing increasingly on its hybrid range as it seeks to appeal to cost-conscious buyers.
The news comes as a major blow to the Biden administration, which has announced billions in subsidies for American carmakers to invest in electrification.
As part of the shift in strategy, Ford said it will scrap plans for an all-electric three-row SUV and replace it with a new hybrid model.
This is expected to cost the company up to $1.9bn (£1.5bn) in writedowns and additional expenses.
Ford had previously delayed the car’s release, originally scheduled for 2025, by two years.
It also delayed an electric pickup truck codenamed “Project T3”, which will now be released a year later than planned, in the second half of 2027.
Bosses blamed fresh competition from Chinese rivals, as it said it needed to cut costs and adapt to motorists becoming increasingly price sensitive.
Ford said: “The electric vehicle market is rapidly evolving as Chinese competitors leverage advantaged cost structures.
“In addition, today’s electric vehicle consumers are more cost-conscious than early adopters, looking to electric vehicles as a practical way to save money on fuel and maintenance, as well as time by charging at home.
“This, coupled with scores of new electric vehicle choices hitting the market over the next 12 months and rising compliance requirements, has amplified pricing pressures.”
John Lawler, Ford’s chief financial officer, said the changes would allow its newly-released vehicles to be profitable within 12 months. He added that the company’s spending on electric cars would be cut from 40pc of capital expenditure to 30pc.
Ford has pushed heavily into EVs in recent years, releasing the F-150 Lightning pickup truck and the Mustang Mach-E SUV.
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