In the latest rollback of EV-focused development, Ford announced they are ending plans to produce an electric sports utility vehicle. The OEM will take a sizeable hit from the decision — possibly seeing $1.9 billion in related expenses.
“We’re committed to creating long-term value by building a competitive and profitable business,” said John Lawler, Ford vice chair and chief financial officer, in a recent company press release. “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 EBIT within the first 12 months of launch for all new models.”
While the OEM is making plans for new electrified models for 2026 and 2027, Ford is pivoting on their EV-heavy strategy to focus on reducing the overall costs of their electric cars, trucks and vans, while also looking to increase range for customers, while limiting the number of EVs models they produce in the near term. This is a differing outlook from a few years ago when CEO Jim Farley took an all-in stance on EVs with a projected investment of $30 billion and a pledge to electrify the OEM’s entire lineup.
While there has been an ongoing love affair between EVs and the world’s automakers over the last four years, with other CEOs echoing Farley’s promise of a full lineup of EV options, many have started to take a more reserved position from their initial one. Last January, GM reintroduced the plug-in hybrid, a step back from its 2021 promise of only producing EVs by 2035.
While the commercial truck market is far from fully electrifying, many OEMs have been displaying their wares during the last few years, with more and more entering serial production. The trucking sector has been slow to adopt this new technology, with most fleets only dipping their toes in the electric pond. Other issues, like lack of chargers, needed utility upgrades, and lengthy infrastructure development times, have also stalled this transition.
During an OEM panel at this year’s ACT Expo, executives from Daimler Truck North America, Navistar, Peterbilt, Volvo Trucks North America, and Mack Trucks were conscious of the fact that the internal combustion engine was not yet ready to fade into the background.
Daimler Truck CEO John O’Leary was first to point out that the company’s diesel business is paying for its development of EVs.
“Obviously, it’d be great to get further up that adoption curve with zero emission, but at this point in time, it’s 99% of the trucks that are sold, and we will gladly reinvest that into the future,” said O’Leary.
“The current diesel engine is diesel 60 times cleaner than it was at the beginning of the century,” added Volvo Trucks’ President Peter Voorhoeve. “The internal combustion engine will continue to exist in the future after 2040, after 2050, and we can ask ourselves, what kind of fuel do we use? Are we able to use fossil-free fuels? The internal combustion engine will get its 150th birthday and its 200th birthday.”
