Ford is postponing construction of a $12 billion electric vehicle factory, including a planned battery factory in Kentucky. The reasons cited were customers’ unwillingness to pay a premium for electric vehicles. You see, they’re too expensive, and now Ford’s massive transformation into an electric vehicle company will take much longer than before.
Ford’s electric vehicle business continues to lose money, with adjusted profits of about $1.3 billion last quarter. So far this year, Ford has lost $3.1 billion on its electric vehicle spending and has said the company will lose a total of $4 billion this year.
The Kentucky plant, a “mega-campus” that builds lithium-ion batteries for electric cars, would be put on hold
The Kentucky plant, a “mega-campus” that builds lithium-ion batteries for electric cars, is on hold. But his Blue Oval City project in Tennessee was still making progress.
Of course, Ford isn’t alone in all this. General Motors is pushing back production of its new electric trucks and SUVs. Tesla CEO Elon Musk spent much of his recent conference call complaining about interest rates. It’s tough out there at the moment.
Customers would probably agree. Well, most of the early adopters have adopted it, and the next group of potential customers have enough sticker shock to keep their wallets closed. Ford has tried to address this problem with new releases like the F-150 Lightning Flash, a mid-priced variant of its electric truck. The company says customers will decide how many electric vehicles it produces — and right now that means pumping the brakes on big projects.
It’s not all bad news. Ford reached a tentative agreement with the United Auto Workers union last night, becoming the first of the three major U.S. automakers to strike a deal. Sure, the strike cost the company around $1.3 billion, and the company has withdrawn its 2023 guidance — meaning it’s not sure it can meet the targets it set at the start of the year.