Ford Motor Company (NYSE:F) on Wednesday announced it has delayed the production of electric vehicles (EVs) at its new Tennessee facility and cancelled its planned fully electric three-row SUV due to high battery costs.
In a press release outlining its revised EV strategy, the automaker said it now expects its EV pickup trucks to begin production in Tennessee in 2027.
It has been previously expected vehicle production would kick off at the site next year.
The company said it also plans to focus its EV efforts on an all-electric commercial van that will begin production in 2026 in Ohio.
Regarding its next three-row SUVs, instead of making these fully electric, Ford says it now plans to make these hybrid vehicles.
This decision will result in a non-cash charge of $400 million related to the write-down of certain product-specific manufacturing assets and could result in additional expenses and cash costs of up to $1.5 billion.
“With pricing and margin compression, we’ve made the decision to adjust our product and technology roadmap and industrial footprint to meet our goal of reaching positive earnings before interest and taxes (EBIT) within the first 12 months of launch for all new models,” Ford CFO John Lawler said in a statement.
“We’re committed to creating long-term value by building a competitive and profitable business.”
Lawler added that the company’s future capital expenditures plans will focus from spending about 40% on all-electric vehicles to spending 30%.
Ford shares edged higher on the news, adding 1.35 at about $11 late morning on Wednesday.