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Released August 23, 2024 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--As the U.S. electric vehicle (EV) market continues to face challenges, Ford Motor Company (NYSE:F) (Dearborn, Michigan) said Monday it plans to delay production at an EV assembly plant under construction, halt production of a new electric SUV, and slash its annual mix of capital expenditures devoted to EVs from 40% to 30%.
David Pickering, Industrial Info's vice president of research for the Industrial Manufacturing Industry, says simply, "times are not great for EVs right now."
"The industry overbuilt the battery plants globally so that aspect is slowing down, the consumers are not buying into the EV shift in the U.S. and sales are not improving dramatically."
He also pointed to the lack of a charging infrastructure in the U.S., noting the government has allocated $7.5 billion to building charging stations across the country via the Inflation Reduction Act and 2021 Bipartisan Infrastructure Investment and Jobs Act, but less than 20 have been built to date.
For more information on Pickering's thoughts regarding a slowdown in EV project spending, see July 18, 2024, article - Automotive Webinar: Electric Vehicle Sector Faces Headwinds; for more information on U.S. automakers reevaluating their EV plans amid slumping sales, see July 18, 2024, article - Electric Vehicles: In the U.S., Initial Enthusiasm Gives Way to Buyer's Remorse.
Ford aims to make its EV business more profitable and capital efficient. "The plan includes adjusting the company's North America vehicle roadmap to offer a range of electrification options designed to speed customer adoption--including lower prices and longer ranges," the company said in an August 21 press release.
The automaker said it will delay the first production of an all-new electric pickup truck at its BlueOval City complex in Stanton, Tennessee, to the second half of 2027. "Retiming the launch allows the company to utilize lower-cost battery technology and take advantage of other cost breakthroughs while the market continues to develop," the company said.
Subscribers to Industrial Info's Global Market Intelligence (GMI) Industrial Manufacturing Project and Plant databases can learn more from a related project report and plant profile.
Click here for a full list of projects at the BlueOvalCity complex, where construction of a lithium-ion battery manufacturing facility is underway.
In addition to adjusting the timing of product launches and realigning battery sourcing, Ford now plans to leverage hybrid technologies for its next three-row SUVs instead of fully-electric technologies as previously planned. "As a result of this decision, the company will take a special non-cash charge of about $400 million for the write-down of certain product-specific manufacturing assets for the previously planned all-electric three-row SUVs, which Ford will no longer produce."
In doing so, Ford has canceled a planned US$1.3 billion retooling project at its assembly plant in Oakville, Ontario that would have shifted the plant from internal-combustion engine output to produce a new all-electric three-row SUV. Click here to read more information on the now-cancelled project.
Pickering expects to see more EV production delays in the coming months.
According to news media reports, Stellantis NV (NYSE:STLA) (Hoofddorp, Netherlands) aims to delay, but not cancel, plans to reopen its Belvidere Assembly Plant in Illinois as an EV operation for its Fiat, Chrysler, Jeep and Dodge brands (the plant was idled in 2023): "to ensure the company's future competitiveness and sustainability, which are necessary to preserve U.S. manufacturing jobs, it is critical that the business case for all investments is aligned with market conditions and our ability to accommodate a wide range of consumer demands," said Jodi Tinson, a spokesperson for Stellantis, in a statement to news media. Stellantis said it "firmly stands by its commitment" to invest in the shuttered facility but did not provide a new timeline.
However, the United Auto Workers Union (UAW) said the decision violates a collective bargaining agreement between the agency and Stellantis, and the union is prepared to file a grievance, which could lead to a national strike at Stellantis.
"The Company has informed the Union that it will not launch the Belvidere Consolidated Mopar Mega Hub in 2024, it will not begin stamping operations for the Belvidere Mega Hub in 2025 and it will not begin production of a midsize truck in Belvidere in 2027."
Subscribers can click here for a full list of Stellantis' projects in Belvidere.
Click here for all project reports mentioned in this article and click here for the related plant profiles.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
David Pickering, Industrial Info's vice president of research for the Industrial Manufacturing Industry, says simply, "times are not great for EVs right now."
"The industry overbuilt the battery plants globally so that aspect is slowing down, the consumers are not buying into the EV shift in the U.S. and sales are not improving dramatically."
He also pointed to the lack of a charging infrastructure in the U.S., noting the government has allocated $7.5 billion to building charging stations across the country via the Inflation Reduction Act and 2021 Bipartisan Infrastructure Investment and Jobs Act, but less than 20 have been built to date.
For more information on Pickering's thoughts regarding a slowdown in EV project spending, see July 18, 2024, article - Automotive Webinar: Electric Vehicle Sector Faces Headwinds; for more information on U.S. automakers reevaluating their EV plans amid slumping sales, see July 18, 2024, article - Electric Vehicles: In the U.S., Initial Enthusiasm Gives Way to Buyer's Remorse.
Ford aims to make its EV business more profitable and capital efficient. "The plan includes adjusting the company's North America vehicle roadmap to offer a range of electrification options designed to speed customer adoption--including lower prices and longer ranges," the company said in an August 21 press release.
The automaker said it will delay the first production of an all-new electric pickup truck at its BlueOval City complex in Stanton, Tennessee, to the second half of 2027. "Retiming the launch allows the company to utilize lower-cost battery technology and take advantage of other cost breakthroughs while the market continues to develop," the company said.
Subscribers to Industrial Info's Global Market Intelligence (GMI) Industrial Manufacturing Project and Plant databases can learn more from a related project report and plant profile.
Click here for a full list of projects at the BlueOvalCity complex, where construction of a lithium-ion battery manufacturing facility is underway.
In addition to adjusting the timing of product launches and realigning battery sourcing, Ford now plans to leverage hybrid technologies for its next three-row SUVs instead of fully-electric technologies as previously planned. "As a result of this decision, the company will take a special non-cash charge of about $400 million for the write-down of certain product-specific manufacturing assets for the previously planned all-electric three-row SUVs, which Ford will no longer produce."
In doing so, Ford has canceled a planned US$1.3 billion retooling project at its assembly plant in Oakville, Ontario that would have shifted the plant from internal-combustion engine output to produce a new all-electric three-row SUV. Click here to read more information on the now-cancelled project.
Pickering expects to see more EV production delays in the coming months.
According to news media reports, Stellantis NV (NYSE:STLA) (Hoofddorp, Netherlands) aims to delay, but not cancel, plans to reopen its Belvidere Assembly Plant in Illinois as an EV operation for its Fiat, Chrysler, Jeep and Dodge brands (the plant was idled in 2023): "to ensure the company's future competitiveness and sustainability, which are necessary to preserve U.S. manufacturing jobs, it is critical that the business case for all investments is aligned with market conditions and our ability to accommodate a wide range of consumer demands," said Jodi Tinson, a spokesperson for Stellantis, in a statement to news media. Stellantis said it "firmly stands by its commitment" to invest in the shuttered facility but did not provide a new timeline.
However, the United Auto Workers Union (UAW) said the decision violates a collective bargaining agreement between the agency and Stellantis, and the union is prepared to file a grievance, which could lead to a national strike at Stellantis.
"The Company has informed the Union that it will not launch the Belvidere Consolidated Mopar Mega Hub in 2024, it will not begin stamping operations for the Belvidere Mega Hub in 2025 and it will not begin production of a midsize truck in Belvidere in 2027."
Subscribers can click here for a full list of Stellantis' projects in Belvidere.
Click here for all project reports mentioned in this article and click here for the related plant profiles.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
