Ford Pauses $12B Electric Vehicle Investment Amid High Costs

Ford Motor Company F is hitting pause on its $12 billion electric vehicle (EV) funding, citing the high cost of EVs and customer unwillingness to pay the premium. This delay includes the proposed EV battery factory in Kentucky.

Ford’s transition into an EV-dominant company is set to take significantly longer than anticipated, reported The Verge The carmaker’s EV division has been suffering losses, with a reported $1.3 billion loss in adjusted earnings in the last quarter alone. Ford has lost $3.1 billion on its EV investments this year and predicts a total loss of $4 billion for the year.

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The Kentucky plant, dubbed a “mega campus” for producing lithium-ion batteries for electric cars, is one of the major projects being put on hold. However, Ford’s Blue Oval City project in Tennessee is still ongoing.

Ford is not alone in facing these challenges. Other automakers like General Motors Company GM are also delaying production of their new EV models. High costs and market conditions have caused hesitation among potential EV customers, leading to a slowdown in the industry.

Despite the setbacks, Ford recently reached a tentative agreement with the United Auto Workers. Being the first among the Big Three U.S. automakers to secure a deal, although the strike cost it approximately $1.3 billion. Additionally, the company has withdrawn its guidance for 2023, indicating uncertainty in meeting its previously set targets.

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