Ford Motor Company (NYSE:F) has slashed its electric vehicle (EV) investment plans by US$12 billion citing customers’ refusal to pay a premium for EVs as the reason.
Denying it was watering down its plans, Ford insisted it was just adjusting the pace of its transition and assessing when and how much capacity it might need.
“We’re not moving away from our second generation [EV] products,” CFO John Lawler told reporters alongside its third-quarter earnings update.
“We are, though, looking at the pace of capacity that we’re putting in place. We are going to push out some of that investment.
“The customer is going to decide what the volumes are,” Lawler said. “Ford is able to balance production of gas, hybrid and electric vehicles to match the speed of EV adoption in a way that others can’t.”
On Wednesday, Ford agreed to a 25% pay rise for its workers after a crippling six-week strike.
Because of the strike's impact, Ford missed its third-quarter earnings forecast and also refused to give any guidance for the full-year outcome.
Lawler said the US$12 billion cutback will include the axing of a planned second battery plant in Kentucky but a new EV manufacturing campus in Tennessee is unaffected.
Ford Model e, its EV business unit, doubled operating losses in the third quarter to US$1.3 billion even though revenues rose by 26%. The division has lost around US$3.1 billion in 2023 so far.