1st Gear: Ford’s New EV Plan Means More Hybrids
Last week, we reported that Ford was canceling its plans for a three-row electric crossover as part of an adjustment to its electric strategy because of cooling demand for EVs. Now we are getting a better look at just how much that strategy is changing and what it’ll end up costing The Blue Oval. Chiefly, Ford is expected to take on $1.9 billion in related charges and write-downs.
The cancelation of this three-row EV comes after Ford said in the Spring that it would be delaying plans for the model by two years to 2027. It also comes during mounting pressure to restore aggressive discounts to get their current EVs off dealer lots.
All of this means more hybrids are coming to Ford’s lineup. From the Wall Street Journal:
Ford said its EV business is on track to lose an eye-watering $5 billion this year alone. In the three-month period ending in June, the automaker lost about $44,000 on every electric vehicle it sold. That is not sustainable.
The automaker said it would take a special, non-cash charge of $400 million to write down expenses related to the cancelation of the electric three-row. The move may result in additional expenses of $1.5 billion. It would be reflected as special items in future quarters.
Ford obviously isn’t alone in this move to pull back on EV plans because of lower-than-expected demand. General Motors has acted similarly.
Sure, fully electric vehicle sales rose 6.8 percent through the first half of the year, WSJ reports, but that represents a sharp deceleration from nearly 50 percent growth in 2023. At the same time, sales of hybrids have risen sharply over the past year.
I don’t know, man. If I was Ford and I was losing $44,000 per vehicle, I’d probably try something new as well.
2nd Gear: Tesla’s Price Cuts Helping Used EV Market
For the most part, Telsa has been lowering the prices of its cars fairly steadily for the last year or so. That’s had the generally positive effect of lowering used electric vehicle prices all over the place, including directly across from Tesla’s Fremont factory in the San Francisco Bay area. From Bloomberg:
