Two of the world’s largest automakers are shifting strategy, cutting back on EV investments as demand among consumers cools.
Ford and Volkswagen have both invested heavily in electric vehicles in an effort to challenge Tesla and stake their claim on what many believe is the future of the automobile industry. Ford, in particular, has made no secret of its desire to dethrone Tesla as the leading EV maker.
Despite Ford’s ambitions, the automaker is scaling back its endeavors, according to the company.
“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. “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.”
According to the company, it will no longer produce a planned all-electric three-row SUV.
In addition to adjusting the cadence of product launches and realigning battery sourcing, Ford now plans to leverage hybrid technologies for its next three-row SUVs. As a result of this decision, the company will take a special non-cash charge of about $400 million for the write-down of certain product-specific manufacturing assets for the previously planned all-electric three-row SUVs, which Ford will no longer produce. These actions may also result in additional expenses and cash expenditures of up to $1.5 billion and the company will reflect those in the quarter in which they are incurred, as a special item.
Similarly, Ford is pushing back the launch of its next-gen electric truck.
Ford is retiming the launch of its groundbreaking electric truck code-named “Project T3” to the second half of 2027. Taking all the learnings from F-150 Lightning customers, the truck will offer features and experiences never seen on any Ford truck, including upgraded bi-directional charging capability and advanced aerodynamics. The truck will be assembled at BlueOval City’s Tennessee Electric Vehicle Center.
Ford isn’t the only company struggling with the transition to electric vehicles. Volswagen told a German newspaper, via Ars Technica, that “building battery cell factories is not an end to itself.” What’s more, the company says its original 2030 goal of 200 GWh of lithium-ion cells is not certain.
With the market change, and EV demand softening, VW may settle for 170 GWh capacity from its existing three battery plants, rather than the six it originally planned. Like Ford, the German automaker has even pushed back the launch of its ID.4 to the early 2030s, according to Reuters.
Ford and Volkswagen’s issues transition to EVs illustrate the challenges traditional automakers face competing with Tesla, Rivian, and other EV-only companies.
from WebProNews https://ift.tt/nBZ94JE
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