Ford pushes back all-electric vehicle plans in favor of hybrids

Ford Motor Company is abandoning plans for a new all-electric vehicle for a new hybrid platform and pushing back plans for its new electric truck, the company announced, in an effort to save money and meet shifting US consumer demand.

The moves come amid manufacturers observing slower demand for all-electric vehicles in the US and an increasing demand for hybrid vehicles. This pivot will help Ford cut costs, the company said in an Aug. 21 statement.

The company aims to improve the profitability of its EV segment, which continues to lose billions of dollars each quarter. The company reported a $1.1 billion loss for its EV segment in its July 24 Q2 report and a $1.3 billion loss in its April 24 Q1 report.

Ford delayed the launch of its all-electric "F-150 Lightning" truck to the second half of 2027, a two-year delay from the company's original timeline, to save on battery technology costs, the company said.

The company previously delayed its upcoming all-electric three-row EVs by two years in April, saying the pushback was intended to meet consumer demand. Now, Ford is canceling the all-electric three-row design entirely, instead leveraging hybrid technologies in the three-row platform.

"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," the company said.

EV automakers this year are reporting a slowdown of all-electric vehicle sales in the US market alongside increased sales of plug-in hybrid electric vehicles. Ford CEO Jim Farley says the company's global hybrid portfolio is on track to grow 40% this year, and the company saw a 36% and 34% growth in hybrid sales in Q1 and Q2, respectively.

Increasing demand for hybrids is driving Ford to decrease its capital expenditures dedicated to all-electric vehicles from about 40% to 30% annually, the company statement reads.

Increased competitiveness in the all-electric US market is partially driving the slump in BEV sales for manufacturers. Volkswagen saw a decline in battery-electric vehicles in Q2, but the loss was offset by a 17% increase in hybrid sales. Mercedes-Benz BEV sales dropped 35% in Q2 year on year, but hybrid sales jumped 27%.

Tesla, the EV automaker with the highest share in the US by far which only sells BEVs, saw a 45% decline in profits in Q2 year on year and saw its share of EV sales drop in California below 50% for the first time.

Ford's share of total EV sales in California increased from 3% to 4% in Q2 year on year. The company sold 20% more vehicles in the state during the same period year on year, according to data from the California Energy Commission.