Ford has written off $1.9bn as it cancelled plans for an all-electric large SUV in the US, opting to produce a hybrid version instead in the latest sign of western carmakers struggling to make profitable electric cars.
The US carmaker said on Wednesday that it would not be able to reach a profit on the electric SUV within a year, its measure of whether a new car is viable, citing the stiff competition from Chinese manufacturers. It will initially write off the cost of $400m (£300m) in tooling for the vehicle, plus another $1.5bn (£1.15bn) in extra costs in the future.
Ford also said it would delay the successor to its F-150 Lightning electric pickup truck until 2027, after initially targeting a launch next year.
Unfortunately, you aren’t the US car market. Oversized trucks and cross-over SUVs sell. The top 3 vehicles in 2023 were:
The rest of the list is littered with trucks and cross-over SUVs. Though a couple Tesla vehicles make the list and do quite respectably (The Model Y is at #5). It’s no surprise that US manufacturers are targeting large vehicles. That’s what US consumers want. And sure, there are lots of arguments to be made against land-yachts. But, it made sense that Ford targeted large vehicles for EV sales. If they can get people to accept the F-150 Lightning, that could really move the needle on EV sales and help them scale up. Expecting customers to both buy-in to a newer technology and make radical changes in their buying habits, is a recipe for failure. Though, it also seems that Ford is managing to fail despite chasing consumer trends.