Given China’s dominance in the electric vehicle market, Ford Motor Company has announced revised plans for its electric vehicle business.

Ford Motor will provide an update on its electrification, technology, profitability and capital needs in the first half of 2025, saying its goal will be to ensure a profitable and capital-efficient electric vehicle business.

In the second quarter of 2024, the Ford Model E reported an EBIT loss of $1.1 billion due to pricing pressure on electric vehicles.

Ford expects capital expenditures of $8 billion to $9 billion in 2024.

According to its vehicle roadmap for North America, Ford is offering a range of electrification options designed to accelerate customer adoption, including lower prices and longer ranges.

Ford will prioritize the launch of a new digitally advanced commercial vehicle in 2026, followed by two new advanced pickup trucks in 2027 and additional future affordable vehicles.

Ford has also realigned its U.S. battery procurement plan to reduce costs, maximize capacity utilization and support current and future electric vehicle production.

“We are committed to innovating in America, creating jobs and delivering incredible new electric and hybrid vehicles that make a real difference in reducing carbon,” said Ford President and CEO Jim Farley. “As the second-largest U.S. electric vehicle brand, we’ve learned a lot about what customers want.”

Ford Motor will cancel production of a planned three-row electric SUV and postpone the launch of a new electric version of its popular F-150 pickup truck, a Reuters report said.

The decision to delay or stop production of new electric models is not unique to Ford. General Motors and other automakers have taken similar steps, suspending significant investments in vehicles that are not selling as quickly as expected.

Ford CEO Jim Farley has stressed that reducing the cost of producing electric vehicles is a critical factor in the company’s long-term success. As Chinese rivals and Tesla continue to lower the cost of producing electric vehicles, Ford is investing significant resources in developing a new architecture for affordable electric vehicles. This new technology will be used in a mid-size electric pickup truck that is scheduled to hit the market in 2027.

Despite these strategic changes, Ford still faces significant challenges. The company is expected to write off approximately $400 million in asset write-offs related to the now-cancelled three-row SUV project, with potential additional costs as high as $1.5 billion.

In addition, Ford is taking steps to align its battery production with U.S. Inflation Reduction Act (IRA) incentives, including moving some battery production to Michigan and advancing plans to produce lithium iron phosphate (LFP) batteries by 2026 using technology licensed from Chinese company CATL.

While electric vehicles will decline as a share of Ford’s annual capital spending, the company is positioning itself for long-term success by focusing on affordability in both vehicle pricing and battery production.