Ford cancels three-row electric SUV and it could be a good decision

Ford has published some changes in its electrification plans for future models and called for a cancellation of the planned three-row electric SUV.

Prior to this shift, the company plans to introduce this three-row electric vehicle by next year. However, the market demand has made the company change its strategy around full electrification due to slow demand. Instead, the company wants to focus on hybrid powertrains for its upcoming three-row SUVs.

The company is also looking to create profitability in this segment and a change in launch strategy could help the company to perform some good moves. The carmaker mentioned that consumers have now become more cost-conscious than early EV buyers.

“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.

Lawer added that the company has adjusted its product and technology lineup to reach positive EBIT within the first 12 months of the launch of all new models.

Therefore, the company is planning to evolve with an electric and hybrid combination. It has planned to launch new three-row SUVs and take a special non-cash charge of around $400 million for the write-down of product-specific manufacturing assets for the previously planned electric three-row SUVs.

The company said it is no longer planning to produce this SUV. It could save the company additional expenses to set up an assembly line dedicated to this model and its related technologies.

At an estimate, it could save up to $1.5 billion and the savings will be reflected in the respective quarter in which they are incurred. With that being said, the company will improve its focus on profitability with mixed production in the US and try to be as much as eligible for government subsidies.

To fulfill this cause, the company will reduce the dedicated all-electric vehicle’s annual capital expenditures to 30% down from 40%.

(source – Ford)