On Wednesday, Ford announced its intention to increase the production of hybrid vehicles while scaling back its previously planned battery-electric models, in response to the evolving market for electrified vehicles.
The company explained that this revised strategy is designed to lower costs, particularly for electric vehicles (EVs), as current buyers are more price-sensitive compared to earlier adopters.
This updated plan also reflects a growing interest in hybrid vehicles, resulting in a reduction of Ford’s investment in EVs from the current 40% of its annual capital expenditures to 30%.
Mid-size Electric Truck to Replace 3-row SUV
Among the upcoming electric vehicles, Ford confirmed the development of a commercial van to be manufactured in Ohio starting in 2026, along with mid- and full-size pickup trucks set for 2027. However, the company has scrapped plans for a three-row SUV initially scheduled to launch in 2025. Ford indicated that it has already invested $400 million in the SUV project, and the total cost of the revised product strategy could reach as high as $1.5 billion.
The mid-size truck will utilize a new affordable EV platform developed by a secret team in California, which will also include the automaker’s BlueCruise automated driver-assist technology. This platform will support various models, including both passenger and commercial vehicles, starting with the mid-size truck.
The full-size truck, referred to internally as Project T3, is set to replace the F-150 Lightning. It will be produced in Tennessee and has been described by Ford CEO Jim Farley as the “Millennium Falcon of pickup trucks.” Originally slated for a 2025 launch, Ford announced that delaying the release would allow the company to take advantage of lower-cost battery solutions and provide the market with additional time to adapt to EVs.
Focus on Affordable Batteries
Ford plans to implement a specific cost-saving measure by producing cheaper lithium iron phosphate batteries domestically, qualifying them for benefits under the Inflation Reduction Act. Additionally, Ford stated it will shift the battery production for the Mustang Mach-E from Poland back to the U.S., suggesting the model will remain available and eligible for Inflation Reduction Act tax credits.
Furthermore, Ford aims to introduce new hybrid models, particularly in larger categories, where battery costs pose challenges. The company specifically noted plans for three-row SUVs with hybrid powertrains, potentially for the Explorer and Expedition models.
Ford also hinted at introducing a hybrid version of its next-generation F-Series Super Duty, which will offer various propulsion options.
An update on Ford’s electrification strategy is anticipated in the first half of 2025.
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