Ford to spend ₹1.77 lakh crore to cancel EV models; shift back to ICE, hybrid cars
In a shocking turn of events, Ford has announced a massive $19.5-billion (about ₹1.77 lakh crore) charge on electric-vehicle investments, marking a significant shift in the company’s strategy towards electric vehicles. The announcement has sent shockwaves throughout the automotive industry, with many wondering what this means for the future of electric vehicles and Ford’s place in the market.
According to the company, $8.5 billion of the charge is tied to costs associated with killing future electric vehicle (EV) models. This is a significant blow to Ford’s EV ambitions, which had been a major focus of the company’s strategy in recent years. The decision to cancel future EV models is a clear indication that Ford is reassessing its priorities and shifting its focus towards more traditional internal combustion engine (ICE) and hybrid cars.
Another significant portion of the charge, about $6 billion, is tied to a now-cancelled battery operation joint venture (JV) with South Korea’s SK On. This JV was meant to be a key part of Ford’s EV strategy, providing the company with access to advanced battery technology and manufacturing capabilities. However, with the JV now cancelled, Ford will have to look elsewhere for its battery needs.
Perhaps the most significant aspect of Ford’s announcement, however, is the decision to convert its flagship electric truck-manufacturing factory in Tennessee to produce models with ICE and hybrid engines. This factory had been specifically designed and built to produce electric vehicles, and the decision to convert it to produce traditional ICE and hybrid models is a clear indication that Ford is shifting its focus away from EVs.
The reasons behind Ford’s decision to shift away from EVs are not entirely clear, but it is likely due to a combination of factors. One possible reason is the high cost of developing and producing electric vehicles, which can be prohibitively expensive for many consumers. Additionally, the lack of charging infrastructure in many parts of the world can make it difficult for EV owners to charge their vehicles on the go.
Another possible reason for Ford’s decision is the increasing competition in the EV market. With many other manufacturers, including Tesla, General Motors, and Volkswagen, investing heavily in EV technology and production, the market is becoming increasingly crowded. Ford may have decided that it is better to focus on its traditional strengths in ICE and hybrid vehicles, rather than trying to compete in a crowded and rapidly evolving EV market.
The implications of Ford’s decision are significant, not just for the company itself, but for the entire automotive industry. If one of the world’s largest and most well-established manufacturers is shifting away from EVs, it could have a chilling effect on the entire industry. Many other manufacturers may begin to question their own EV strategies, and some may even follow Ford’s lead in shifting away from EVs.
On the other hand, Ford’s decision could also be seen as an opportunity for other manufacturers to fill the gap left by Ford’s departure from the EV market. Companies like Tesla, which have invested heavily in EV technology and production, may see an increase in demand for their vehicles as consumers look for alternatives to Ford’s cancelled EV models.
In conclusion, Ford’s decision to shift away from EVs and focus on traditional ICE and hybrid vehicles is a significant development in the automotive industry. The company’s announcement of a $19.5-billion charge on electric-vehicle investments, including $8.5 billion tied to costs associated with killing future EV models, is a clear indication that Ford is reassessing its priorities and shifting its focus towards more traditional vehicles.
As the automotive industry continues to evolve and change, it will be interesting to see how Ford’s decision plays out. Will other manufacturers follow Ford’s lead and shift away from EVs, or will they see an opportunity to fill the gap left by Ford’s departure from the market? Only time will tell, but one thing is certain: Ford’s decision is a significant development that will have far-reaching implications for the entire industry.
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