EV Ambitions on Hold: Ford Delays Canadian Electric SUV Production

Ford has announced its revised strategy for its Oakville Assembly plant in Canada, originally slated for electric vehicle (EV) production. Instead, the facility will focus on manufacturing larger gasoline-powered versions of its popular F-Series pickup trucks.

Ford’s decision follows second-quarter EV sales in the U.S. Ford led the pack among traditional automakers, with EV sales soaring 61% year over year to 23,957 units. This helped propel the company’s overall sales growth for the quarter and solidified its position as the second-largest EV seller in the U.S., ahead of General Motors.

The decision to focus on larger, gasoline-powered versions of its F-Series pickups in Canada marks a shift from Ford’s initial plan to launch three-row electric SUVs at Oakville in 2027, a delay attributed to slower-than-expected growth in electric vehicle demand, as stated in April. Despite this adjustment, Ford reiterated its commitment to the electric vehicle segment without specifying the new production location.

The global slowdown in electric vehicle demand has prompted industry leaders like Tesla and BYD to slash prices to stimulate sales, while traditional automakers such as Ford and GM recalibrate their electric vehicle ambitions. Ford reported substantial losses in its EV business in recent years, projecting further financial challenges in 2024, reinforcing its commitment to launching profitable next-generation EVs.

Ford has increasingly focused on hybrid vehicle production to appeal to consumers not yet ready to fully embrace electric vehicles. The company aims to quadruple hybrid production in the near term, buoyed by robust demand for its profitable F-150 trucks, produced across assembly plants in Kentucky, Ohio, and now Oakville.

Amid financial pressures in its EV sector, Ford’s commercial business has emerged as a profit center, with the company banking on software-related services to drive future profitability. The division achieved operating profit margins nearing 17% in the last quarter, underscoring its strategic importance within Ford’s broader portfolio.

Some key EV developments this month include:

Online car marketplace Carvana unveiled new tools for a smoother electric vehicle buying and selling experience.

Starbucks announced plans to partner with Mercedes-Benz High-Power Charging to install EV chargers at more than 100 of its stores across the U.S. This initiative kicks off along Interstate 5, a key travel route on the West Coast.

In a bid to attract high-income EV owners, shopping centers worldwide are embracing EV charging stations. The trend gained momentum earlier this month when BP Pulse, BP’s EV charging unit, announced a partnership with Simon Property Group, the U.S.’s largest mall developer.

The federal government will grant car and auto parts factories in eight states $1.7 billion to begin producing electric vehicles and other clean energy technology, the Biden administration announced July 11.

So, where does that leave the trajectory of EV sales?

According to Jennifer Weiss, co-director, NC Clean Energy Fund, educating the public about the benefits of EVs is crucial to making them a serious consideration for consumers.

“We have a huge hurdle right now getting people to test drive and trying things out and realizing they can do what they do on a daily basis with an electric vehicle,” she noted.

“Dealerships right now don’t have a lot of electric vehicles on the lots. It’s the chicken and the egg. Until we see a lot more of the electric vehicles actually on the lots so people can test drive them and compare them to a traditional fuel vehicle, I think we have a little bit more of an uphill climb.”