Ford to spend ₹1.77 lakh crore to cancel EV models; shift back to ICE, hybrid cars
In a shocking move, Ford has announced that it will be taking a massive $19.5-billion (approximately ₹1.77 lakh crore) charge on its electric-vehicle investments. This decision comes as a major setback to the company’s plans to transition to electric vehicles (EVs) and marks a significant shift in its strategy. According to the company, $8.5 billion of this charge is tied to costs associated with killing future EV models, while about $6 billion is related to a now-cancelled battery operation joint venture (JV) with South Korea’s SK On.
This move is a stark reversal of Ford’s previous commitment to EVs, which had been a major focus area for the company in recent years. However, it seems that the company has now decided to shift its focus back to internal combustion engine (ICE) and hybrid cars. As part of this strategy, Ford will be converting its flagship electric truck-manufacturing factory in Tennessee to produce models with ICE and hybrid engines.
The decision to cancel EV models and shift back to ICE and hybrid cars is likely to have significant implications for the company’s operations and profitability. The $8.5 billion charge related to killing future EV models is a significant expense, and it will be interesting to see how the company plans to recover from this investment. Additionally, the cancellation of the battery operation JV with SK On is also a major setback, as it was seen as a key partnership for Ford’s EV ambitions.
The conversion of the Tennessee factory to produce ICE and hybrid engines is also a significant development. This factory had been earmarked as a key production facility for Ford’s EVs, and its conversion will likely require significant investments in new equipment and technology. However, it is clear that the company believes that this is a necessary step to remain competitive in the market.
The reasons behind Ford’s decision to shift back to ICE and hybrid cars are not entirely clear. However, it is likely that the company has taken a closer look at the market demand and competition, and has decided that its EV strategy was not viable. The EV market is highly competitive, with several established players and new entrants vying for market share. Additionally, the high costs associated with EV production, including the cost of batteries and electric motors, may have made it difficult for Ford to achieve profitability.
Another factor that may have contributed to Ford’s decision is the evolving regulatory landscape. While there has been a significant push towards EVs in recent years, there are still many countries and regions where ICE and hybrid cars remain the dominant choice. By shifting its focus back to ICE and hybrid cars, Ford may be able to tap into these markets and achieve greater economies of scale.
The implications of Ford’s decision are far-reaching, and will likely have significant effects on the company’s operations and profitability. The $19.5-billion charge is a significant expense, and will likely have a major impact on the company’s bottom line. Additionally, the cancellation of EV models and the conversion of the Tennessee factory will require significant investments in new equipment and technology.
In conclusion, Ford’s decision to spend ₹1.77 lakh crore to cancel EV models and shift back to ICE and hybrid cars is a significant development that marks a major shift in the company’s strategy. While the reasons behind this decision are not entirely clear, it is likely that the company has taken a closer look at the market demand and competition, and has decided that its EV strategy was not viable. The implications of this decision are far-reaching, and will likely have significant effects on the company’s operations and profitability.
As the automotive industry continues to evolve, it will be interesting to see how Ford’s decision plays out. Will the company be able to achieve greater success with its ICE and hybrid cars, or will it ultimately regret its decision to abandon its EV ambitions? Only time will tell, but one thing is certain – the automotive industry will be watching Ford’s moves closely in the coming months and years.
About the Author
