Ford’s EV Future Disappears

By Douglas A. McIntyre Published Oct 27, 6:38AM EDT

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Ford’s EV Future Disappears — © Toa55 / iStock via Getty Images

Executive Chair Bill Ford and Chief Executive Jim Farley expressed concern that a highly favorable contract with the United Auto Workers (UAW) union could deeply wound Ford Motor Co. (NYSE: F | F Price Prediction) financially. However, they could always point to Ford’s EV future and how it would transform the car company. Instead, it announced a major retreat from these electric vehicle plans. (These are the first eight vehicles that stopped production when the UAW called a strike.)

Ford’s battle with the UAW is not over. The UAW management has cut a deal wildly in its favor. However, union members may not accept it as good enough. A new round of bargaining could put Ford in an even worse position. The contract is already rich. Union members get a raise of 25% over about four years. They receive improved and expensive benefits. Ford’s chief financial officer, John Lawler, worried that this would compromise the company’s ability to develop new vehicles.

Shockingly, Ford throttled back sharply in its EV investment. CNBC reported, “Ford will postpone about $12 billion in EV investment as buyers become more cautious.” Almost all of Ford’s road forward was based on this massive investment. It has been thrown on the junk pile and will be hard to retrieve as some other auto companies move forward, although General Motors may also have to retreat. Tesla, however, continues to charge ahead.
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Ford said EV demand had softened. For Ford, it may never have been hard. Consumers will not pay premiums for EVs, management said. What it did not say is that EV sales face a choppy period, at best, because consumers do not like that there are too few charging stations, charging takes too long and the range of the cars is not favorable compared to gasoline-powered models. There is also evidence that Republicans rarely buy EVs, which is a large dent in the market.
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Ford’s stock has fallen near its 52-week low and will not recover soon. Shares are down 17% in the past three months. Bill Ford and Farley need to make the case that the company can recover from its recent setbacks. With Ford’s EV future diminished, they cannot do that for the time being.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.