Ford Motor loses about $100,000 on each electric car, forcing it to review its strategy. About this reports Bloomberg.
Ford plans to cut investments in this area by $12 billion, delay the release of new models and lower prices for existing ones to remain competitive. The company will also reduce battery orders from its suppliers in an effort to minimize mounting losses that are expected to hit $5.5 billion this year.
Ford CEO Jim Farley said the Model E division has become a major problem for the company. Due to falling prices of electric cars and reduced demand, losses on each car sold have increased significantly, making things difficult for the company.
Losses from electric vehicle production could eat up nearly all of the profitability of traditional combustion-engine vehicles that Ford Blue makes, including popular models like the Bronco and the Maverick hybrid pickup, experts estimate.
Demand for electric vehicles in the U.S. has been weaker than expected, leading to excess inventories at battery makers and lower prices for key metals such as lithium, cobalt and nickel.
Ford has also decided to focus on budget electric cars, accelerating the development of models costing from $25,000, which should appear on the market in late 2026.