Ford Warns of $1.9bn Writedown Due to Electric SUV Cancellation
Ford's Writedown Due to Electric SUV Cancellation
Ford is making headlines with its recent announcement regarding the cancellation of plans to manufacture a three-row electric sport utility vehicle (SUV). The US carmaker reported that this decision could result in a significant $1.9 billion writedown. The cancellation is primarily due to the inability of the SUV to turn a profit within just a year after its anticipated launch. Market conditions are proving challenging for electric vehicles.
Market Pressures on Electric Vehicles
- Ford's Chief Financial Officer, John Lawler, emphasized the need for profitability in the face of competition.
- Factors contributing to the cancellation include a crowded market segment.
- Furthermore, mainstream consumers seem hesitant to pay premium prices for EVs.
In a strategic move, Ford intends to shift focus to building this SUV as a hybrid model instead. This pivot necessitates a $400 million writedown related to manufacturing equipment, with an additional potential $1.5 billion expected in future quarters as the company reevaluates its electric vehicle strategy.
Future Directions Amidst Challenges
This situation underscores the current realities of the electric vehicle industry and the complexity of meeting both profitability and consumer expectations.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.