Strategic Shift Leads Ford to Delay New EV Plant, Cancel Electric Three-Row SUV

Ford Motor Company announced on Wednesday a strategic shift in its plans for electric vehicles (EVs), delaying the production of a next-generation all-electric pickup truck at its new Tennessee facility and scrapping plans for a three-row electric SUV.

Instead, the automaker will focus on expanding its lineup of hybrid vehicles and developing electric commercial vehicles. This includes the introduction of a new electric commercial van in 2026, followed by two electric pickup trucks in 2027.

The upcoming electric pickups will consist of a full-size truck, slated for production at the Tennessee plant in 2027, and a new midsize truck being designed by a specialized team in California. Ford CFO John Lawler explained that this strategic pivot is driven by market insights and the company’s strengths in commercial trucks and SUVs. “We’re going to focus on where we have a competitive advantage,” Lawler said, emphasizing the importance of capital efficiency and profitability in Ford’s EV strategy.

However, this shift comes with financial repercussions. Ford will incur a non-cash charge of approximately $400 million due to the write-down of product-specific manufacturing assets, including those related to the now-canceled three-row SUV. Additionally, the company anticipates potential expenses and cash outlays of up to $1.5 billion, which will be reported as special items in the relevant quarter.

Ford’s future capital investments will also be adjusted, with the portion allocated to all-electric vehicles reduced from 40% to 30%. Although no specific timeline was provided, this change reflects Ford’s response to the slower-than-expected adoption of EVs and the ongoing challenge of producing them profitably.

The Tennessee plant, which represents a $5.6 billion investment, was initially expected to begin vehicle production next year. Despite the delays, Ford still plans to commence battery cell production at the site by 2025.

These latest adjustments highlight Ford’s need to adapt quickly to customer feedback and market conditions. Lawler noted that Ford’s experience in the EV market over the past two years has underscored the demand for a broader range of electrification options.

Ford remains committed to updating its current EV models, including the Mustang Mach-E and F-150 Lightning, while preparing to provide investors with an update on its electrification strategy, technology advancements, and capital requirements in the first half of 2025.