Ford Will Not Scrap Combustion And Hybrid Vehicles For EVs: 'That's Not Our Strategy,' Says CEO

Ford Motor Co F CEO Jim Farley said on Thursday that the company will continue to focus on combustion engine vehicles and hybrids while it scales its EV business.

What Happened: “Our bet is maybe different than others who just said, look, we’re going to get rid of an ICE Explorer and go to an EV Explorer. That’s not our strategy,” Farley said during the company’s third-quarter earnings call.

The company currently has affordable Maverick trucks and a strong international business with Ranger and Everest. “Those markets won’t go EV anytime soon. And the markets where we’re in, like F-150, Super Duty Pro, they’re not duty cycles that are going to go EV,” he added.

The company will instead now delay its $12 billion EV investment including by delaying its EV battery plant in Kentucky. During the third quarter, the company’s EV unit posted a loss in earnings before interest and taxes of $1.3 billion, taking its nine-month EBIT loss to $3.1 billion.

Why It Matters: However, the company continues to be bullish on its EV future and expects its Gen-2 and 3 products to pave the way to a successful EV transition. The new products will also be more competitive on cost, the CEO said.

“A great product is not enough in the EV business anymore. We have to be totally competitive on cost,” he remarked.

The company had previously forecast a full-year pretax loss of $4.5 billion for the Ford Model e unit. However, the company withdrew its full-year guidance on Thursday, citing “uncertainty” pertaining to ratification of a new workers’ contract with the United Auto Workers (UAW) union.

Following a strike that dragged on for over a month, Ford and UAW reached a tentative agreement on Wednesday.

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