That didn’t work out well, did it? Ford has thrown its electric vehicle strategy out the window, scrapping plans for a large electric SUV and instead focusing on cheaper and smaller electric cars and electric gadgets. It turns out that customers want to buy affordable vehicles, even if they are electric. Who would have thought?

“As the second-largest U.S. electric vehicle brand, we’ve learned a lot about what customers want and value and what it takes to compete with the best in the world with cost-effective design. And we’ve developed a plan that gives our customers maximum choice and plays to our strengths,” CEO Jim Farley said in a statement released this week.

However, these findings have not been applied to electric vehicles.

The Ford statement admits what most others in the industry have known for some time. Chinese electric car makers are better than them. They make better cars and they are cheaper, and despite its own best efforts, Ford is losing about $80,000 on every electric car it produces.

“The electric vehicle market is evolving rapidly as Chinese competitors leverage advantageous cost structures such as vertical integration, low-cost development, advanced multi-energy battery technology and digital experiences to expand their global market share,” Ford said in the statement.

“In addition, today’s electric vehicle buyers are more cost-conscious than early adopters. For them, electric vehicles are a convenient way to save money on fuel and maintenance, and also save time by charging at home.

“This, coupled with a plethora of new electric vehicles coming to market over the next 12 months and increasing compliance requirements, has increased pricing pressure. This dynamic underscores the need for a globally competitive cost structure while maintaining selectivity across customer and product segments to ensure profitable growth and capital efficiency.”

Ford’s rollout of electric cars has been patchy. Ford has the Mach-e, which has sold reasonably well despite its relatively high price, and the massive F150 Lightning electric pickup truck. Ford has performed better in global markets with its Transit electric delivery van.

The company had planned a three-row electric SUV but decided that wouldn’t work and built a hybrid version instead. The company will write off $400 million from that failure and potentially another $1.9 billion while it refocuses its business and fixes its mistakes.

It promises a new electric van – to capitalise on the success of the E-Transit – and a new platform that will cater to buyers’ preferences and produce a cheaper “mid-size” pickup or electric ute, although it won’t be available until 2027.

And the company is moving its battery production — particularly for the Mach-e — from Poland to the U.S. to take advantage of the Inflation Reduction Act. “An affordable electric vehicle starts with an affordable battery,” Farley said. “If you’re not competitive on battery cost, you’re not competitive.”

Aha. Now, high tariffs are the only thing protecting the US market from the smarter Chinese electric car makers. But that may not be enough to protect the reputation of US automakers or save them from their own follies.

Giles Parkinson is founder and editor of The Driven and editor and founder of the websites Renew Economy and One Step Off The Grid. He is a journalist for nearly 40 years, a former business editor and deputy editor of the Australian Financial Review, and owns a Tesla Model 3.