The American EV industry has hit the wall

Ford says that after three years of making massive investments in new plant and equipment needed for the production of its F-150 Lightning and electric Mustang Mach E models, it will now focus on developing hybrid options across its entire model lineup. This places Ford on a strategic path similar to Japanese giant Toyota, which has become an object of scorn and ridicule from the climate alarmist left and globalist policymakers in the US and Europe for its stubborn, ongoing focus on making and successfully selling hybrids rather than pure EVs.

In a statement, Ford CEO Jim Farley said, “As the No. 2 EV brand in the US 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.”

The timing of bringing new models to market, of course, is crucial to the success of any carmaker’s business. It is becoming increasingly obvious that the ongoing push by Western governments to force EVs onto mostly unwilling consumers with trillions of dollars in debt-funded subsidies has gotten way out ahead of what the market is really willing to bear. When Farley and GM CEO Mary Barra bought whole hog into the Biden subsidy program in 2021, committing their companies to billions of dollars of new investments into untested and unproven EV model lines, they appeared to forget the crucial nature of timing in the market. 

The results at Ford have been stark. Even though the company reported an overall profit of $4.3 billion for 2023 thanks to strong sales in its traditional gasoline- and diesel-powered passenger and heavy truck lines, it managed to lose $4.7 billion in its Model e EV division. Back in January, I and many others questioned how long the company’s major investors would be willing to allow management to sustain this magnitude of losses in the face of an American market that remains so clearly reluctant to pay princely sums of money for cars that so clearly do not meet the expectations and needs of buyers. 

Thursday’s announcement of this major shift in strategic direction provides a clear answer to that question. The ball is now in Ms. Barra’s court, and it will be very interesting to see how much longer her investors are willing to let her continue throwing their money after Biden’s ridiculous EV dreams.