Editor’s note: The headline of this story has been updated in order to accurately portray Ford’s electric vehicle program and the story itself has been updated to add factual attribution and other revisions. After achieving record sales in the electric vehicle segment, Ford Motor Co. has taken a step back, scaling down its its intention to invest $11.4 billion in EV development, which the automaker announced in 2021. What does Ford CEO Jim Farley know that Tesla CEO Elon Musk doesn’t?
Despite the F-150 Lightning becoming America’s top-selling electric truck and the Mustang Mach-E recording impressive sales, Ford is revising its EV strategy. In October, Chief Financial Officer John Lawler announced a reduction in planned EV investment, including postponing around $12 billion in EV spending, as CNBC reported at the time. Ford is reducing production at its plant in Marshall, Michigan, cutting down on inverter and motor capacity and scaling back integration plans, according to a November Detroit Free Press report.
“Great product is not enough in the EV business anymore,” Farley said during the company’s third-quarterearnings callon Oct. 26, 2023, as reported by Fox. “We have to be totally competitive on cost.”
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This decision comes amid a broader shift in the market, where hybrids are gaining increased focus.
Despite placing second in U.S. EV sales, the bulk of Ford’s vehicle sales continue to be gas-powered internal combustion engine vehicles.While this shift might seem like a step back for the EV industry, smart investors acknowledge the broader context. In the U.S., a compound annual growth rate for the electric vehicle sector of 18.2% is forecasted from 2024 to 2028, resulting in a projected market volume of $161.6 billion by 2028, according to Statista’s 2023 Market Data and Analysis Report.Despite indications of a consumer preference for hybrids, the EV industry continues to be a lucrative option for investors, specifically in the startup investing and venture capital realm. Startups have been unsuccessful for decades in breaking into the auto manufacturing industry. But now, there…
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