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Ford to delay spending $12 billion on EV expansion due to slowing customer demand

The company reported an operating loss of $1.3 billion in the third quarter, which comes to a loss of $62,016 on every EV it sold in the period.

Published: October 27, 2023 12:43pm

Updated: October 27, 2023 1:54pm

Ford announced Thursday that it will delay about $12 billion in planned spending to increase EV manufacturing capacity.

Ford CFO John Lawler made the statements in a media briefing. The major U.S. automaker had expected electric vehicle sales to increase at a much higher pace, according to CNBC.

Persistently high interest rates are slowing the pace of demand for EVs, Reuters reported this week.

On Thursday, Ford reported an operating loss of $1.3 billion in its EV division during the third quarter. In the statement, the auto maker said that customers are unwilling to pay the premiums for EVs over that of gas or hybrid vehicles, which combine characteristics of battery and gas power.

Lawler said the company still isn't moving away from its second generation EV products.

“We are, though, looking at the pace of capacity that we’re putting in place. We are going to push out some of that investment,” he said.

The delay in spending impacts a proposed second battery plant at a new campus in Kentucky, which was announced in September, but Lawler said an EV manufacturing campus in Tennessee will continue as planned.

Energy expert Robert Bryce calculated that the losses Ford reported in the third quarter amount to $62,016 for each of the 20,962 EVs the company sold during the period.

The total loss this year on Ford’s EV business comes to $3.1 billion, Bryce wrote.