Ford Motor Company, the second largest car maker in America recently announced it was making major changes in their production of electric vehicles, commonly referred to as EVs.
Ford has put a hold on plans they announced last year to spend $1.8 billion to transform an assembly plant in Canada into a hub for electric vehicle manufacturing.
Now their plan is to shift production at that plant to Ford’s gas-powered F-Series trucks which have been the best-selling truck lineup in America since 1977, and Ford’s best-selling vehicle overall since 1981.
In its coverage of Ford’s decision to pivot on EV’s, the New York Times noted,“The move is the latest example of how automakers are pulling back on aggressive investment plans in response to the slowing growth of electric vehicle sales.”
This decision by Ford comes with a measurable impact on their bottom line and on 2,700 auto worker jobs at their Canadian plant.
That plan alone will cost the company at least $400 million as they write down the costs for the manufacturing equipment they had put in place to build the EVs. Ford estimates the change in plans could ultimately cost them upwards of $1.5 billion.
Those costs pale in comparison to Ford losing $4.7 billion on EV sales last year, which is approximately $40,525 per electric vehicle sold.
Ford’s latest pullback from EVs is no surprise.
The economic reality is that Ford, other car makers and advocates for electric vehicles made unrealistic and unsustainable projections on consumer demand for EVs.
The two most likely factors for less-than-projected consumer demand are purchase price and reliability concerns.
The July 2024 edition of the Kelley Blue Book reports the average price for a new EV was $56,520, with some models costing more than $100,000.
Reliability is a concern due to a relatively limited number of EV charging stations.
Nationwide, there were 68,475 private and public charging stations at the beginning of this year, according to the U.S Department of Energy. While that’s more than twice the number in 2020, but it’s still just a third of the number of gas stations and well below projections.
A 2023 survey by the Associated Press-NORC Center for Public Affairs Research and the Energy Policy Institute at the University of Chicago reported that 77% of those polled voiced concerns about how they would charge an EV if they bought one.
This concern is not limited to potential EV buyers. Some current EV owners share it.
Earlier this year, the New York Times profiled a purchaser of a Ford F-150 Lightning EV. The purchaser said it was the “coolest vehicle he’d ever owned” and “it is unbelievably fast and responsive,” He also said, “the technology is amazing.” High praise indeed.
The problem for this otherwise enthusiastic EV owner was the EV’s range or, more importantly, lack of range.
When the weather grew colder, this owner found that the distance his vehicle could travel fell dramatically. His faith in the $79,000 truck diminished to a point where he found himself wondering if he should sell it.
“People say ‘range anxiety’ — it’s like it’s the driver’s fault,” he told the Times. “But it’s not our fault. It’s actually they’re not telling us what the real range is. The truck says it’s three hundred miles. I don’t think I’ve ever gotten that.”
Such observations are not a positive branding moment for electric vehicles or for Ford.
So, does all this news mean electric vehicles will never be more widely accepted?
In a word … no.
History is full of stories where the acceptance of new technologies grew slowly but steadily over time following initial acceptance by early adopters.
Early adopters are individuals who buy and try a new product or technology soon after it is available. Early adopters eagerly embrace change, are often (but not always) young, often (but not always) highly educated, and often (but not always) having robust disposable income.
While early adopters are among the first to purchase and use new products and services, they often become public opinion leaders over time.
Widespread public acceptance of their opinions can be accelerated when producers and marketers of a new technology listen to, accept suggestions from, and address legitimate concerns brought to their attention by early adopters.
Ford appears to be on track to do that. Their President and CEO recently said, “As the number 2 brand in the U.S. for the past two years, we are committed to scaling a profitable EV business, using capital wisely, and bringing to market the right gas, hybrid, and fully electric vehicles at the right time.
Ford currently anticipates the right time will not occur until 2027 when they plan to resume EV production at their Canadian Assembly plant.
For now, it is clear that electric vehicles are an idea whose time has not yet come.
David Reel is a public affairs and public relations consultant who lives in Easton.
Rob Ketcham says
It would seem the Spy now has its very own Luddite
David Reel says
I suggest you look up the definition of Luddite before you say I am one. The dictionary defines a Luddite as “people who do not like technology” I do not dislike technology and never have disliked it. Nowhere in my commentary did I write that I oppose electric vehicles. I simply suggested widespread adoption of electric vehicles by consumers will take time. For the record, I use a computer and cell phone every day and have done so since that technology first became available.
Lyn Banghart says
We love our Volvo XC 40 Recharge. And we have had no problems with charging. We put a charger in our garage and have always been able to find a charging station. Granted we don’t use it for very long trips but at least it’s one vehicle we don’t have to buy gas for. EVs have a long way to go before they could become mainstream. And we are very fortunate that we could purchase one. We traded in a Toyota Highlander Hybrid. But I hope our country will not give up on them.
Craig Fuller says
I enjoy reading David’s thoughts on all matter of topics. But, this one is kind of personal: “For now, it is clear that electric vehicles are an idea whose time has not yet come.”
It’s my experience that this expression is most often shared by someone who has not given owning an all electric vehicle a fair try.
For me, the time to own an electric vehicle came about a year ago, and I have had only a positive experience. I’ve never come close to running out of battery power. I’ve never grown anxious that I might not get to a destination. More than 90% of my charging occurs at home plugged into a 220 volt power source. Long trips north and south have not been a problem as the vehicle shows me the best place to stop for 15 – 20 minutes for a fast charge, and so far I really haven’t wanted to sit for 6 hours driving without a break.
There is no question that EVs are evolving as is the infrastructure. The range is getting greater to meet demand. The chargers are getting faster. Those free municipal chargers were all kind of silly unless you could hook up for a day.
EVs do require just a bit of planning. But, fear of charging an EV would be like not taking your boat out because you didn’t know where you would find shore power.
This having been said, it’s fine with me if the demand for EV slows while the infrastructure grows…..more options for all of us quite happy to be driving a quiet, non-toxic fume emitting vehicle everywhere we go.
Just know that when “the time does come,” those of us young early adopters (in our 70s) will have paved the way.
Bryan McGrath says
I think Mr. Reel is right, in that he uses the word “yet”. Having a level 2 home charger is a real game changer for a lot of owners, but once you cut loose on the road, anxiety does occur. I’m enjoying my new Lucid Air, but my more limited commuting circumstances enable some of that. The tech is unreal, the ride is snappy and quiet.
James Thomas Bruce III (Jim Bruce) says
Mr. Reel says electric vehicles is an idea whose time has not yet come. He concludes this by citing Ford Motor Company’s decision to delay production of EV trucks, and the sticker shock price of EVs, citing an average price of $56,520.
First, note that the average price of a new pickup truck is more than $60,000. New pickups are not cheap, EV or not.
Second, Ford is just one EV truck maker, not the entire EV industry. Maybe Ford’s competitors will produce better EV pickups faster, as happened with Tesla and EV automobiles.
Third, since when do we all have to agree on when the time has come to buy any new technology? It is an individual decision, and it is happening, as Mr. Reel agrees, over time.
Finally, and most important, why the rush? Why does it matter whether there is delay in how fast EVs penetrate the market? Mr. Reel does not discuss that. We must reduce gasoline and diesel fuel consumption in motor vehicles to address climate change by lessening carbon emissions into the atmosphere. I see no evidence that the weather-related consequences of climate change are under control or lessening.
Rob Etgen says
I disagree with Mr. Reel. My family is on our second EV and we are all fully convinced. Both of our EVs were/are smooth riding, silent, FAST, and have been the best driving experiences of our lives. To take care of these EVs you just need to plug them in at night. There are no oil changes, no transmission, no exhaust system, no engine heat, and you pay $0 for high priced and polluting gas. Regarding range anxiety, well over 95% of our excursions are to and from work or to local needs, and if a family member has a longer trip that exceeds range we swap cars. EVs have been/are a joy for this family!