Ford Backpedals: Is The EV Revolution Going Off The Rails?
As climate change produces record heat waves and massive weather disruptions worldwide, car makers like Ford are pulling back from their EV plans in the wake of huge losses.
Ford Motor Company expects to build electric vehicles (EVs) at a rate of 600,000 per year sometime in 2024, later than the company’s predictions that those production levels would be met before the end of 2023. Further, Ford’s target of 2 million EV sales per year by the end of 2026 is now also in question.
Image courtesy of Ford Motor Company
Despite the acclaim accorded the Ford Mustang Mach-E and F-150 Lightning EV models, the company’s Model e electric vehicle unit lost $1.08 billion from April through June of this year, and is expected to lose $4,5 billion during the entire year, significantly more than the $3 billion loss the unit experienced last year. Ford Blue, which sells more traditional fossil-fuel-powered offerings, earned $2.31 billion during this year's second quarter, while the Ford Pro commercial unit earned $2.39 billion.
Electric Vehicle Inventory
Unlike last year when EVs were scarce, the U.S. inventory surpassed 90,000 unsold vehicles at the end of 2023’s second quarter. EV sales are increasing, with 1 million expected (representing 7 percent of the U.S. market). Still, the inventory sitting on dealer lots is also increasing as more models become available. Market leader Tesla has reduced its prices to put pressure on the competition. The U.S. EV inventory is 92 days, almost double the 54-day supply of conventional gasoline-powered vehicles.
Meanwhile, carmakers are pouring billions into EV development and production, with more than 90 new models scheduled for sale in the U.S. through 2026. EVs are considered one of the primary ways to fight the transportation sector's contribution to climate change by reducing or eliminating the carbon dioxide emissions produced by burning fossil fuels. Car makers like General Motors and Ford have predicted that they will no longer make gasoline-powered models after 2035. However, the transition period between now and then will be difficult. Legacy carmakers will likely hold on to their profitable gasoline-powered models as long as possible to help pay the bills until their EVs can show a profit.
The Hybrid Solution
Ford has decided that one way to face the transition is by building more hybrid vehicles. Until now, Toyota has been the major proponent of a hybrid gasoline-electric approach, insisting that fully battery electric powertrains are not the only solution to reducing greenhouse gas emissions from personal vehicles. The Japanese maker has received significant criticism for dragging its feet on developing and introducing battery-powered EVs. Now Ford says it is surprised at the popularity of the hybrid model of its F-150 pickup truck (10 percent of customers opting for the hybrid version) and small Maverick pickup (where 56 percent of buyers are choosing the $1,500 optional hybrid powertrain).
Ford Maverick hybrid. Image courtesy of Ford Motor Company
From a consumer viewpoint, a hybrid makes a lot of sense. An electric motor and small battery storage system can store energy when braking or coasting downhill and return it to the system when the vehicle accelerates. This increases the vehicle's overall efficiency well beyond what a traditional gasoline engine can deliver.
Unlike a battery EV, a hybrid system does not suffer from range issues. Powered by a gas engine, on longer trips it can refuel at any gas station. Ford has integrated its pickup truck hybrid systems in a way that can also provide electricity through outlets located in the truck bed to provide power for tools on a construction site or for a small refrigerator making tailgating and camping more enjoyable.
Ford F-150 Lightning Pro-Charging. Image courtesy of Ford Motor Company
In July 2023, we have just experienced the hottest month ever recorded. In addition, ocean temperatures have reached levels never before experienced, and a buoy in a bay in South Florida hit 101.1 degrees Fahrenheit at a depth of 5 feet during the past month.
According to the UN Intergovernmental Panel on Climate Change’s (IPCC) most recent report, climate change is causing substantial damage and increasingly irreversible losses in terrestrial, freshwater, and coastal and open ocean ecosystems and has exposed millions to acute food insecurity and reduced water security, particularly in Africa, Asia, Central and South America, Pacific Islands, and the Arctic.
The Issue With Hybrid Vehicles
As attractive as hybrid vehicles might be, the downside is that they are still powered by engines running on fossil fuels. As such, they still produce carbon dioxide emissions contributing to climate change. If Ford and others veer away from battery EVs by building more hybrids, resulting in slower adoption of EVs, the climate will suffer.
It’s a tough call. By building hybrids, Ford, Toyota, and others can claim to supply the kind of vehicles the public wants.
It has become clear that designing and building EVs is an expensive proposition—legacy makers are showing that without the funds generated by building and selling traditional fossil fuel-powered machines in the short term, they won't be able to complete the long-term transition to electrification. While a hybrid is still better than a traditional gasoline-powered vehicle in terms of its emissions, it may serve to delay progress on zero-emission transportation. It’s a delay we might be unable to afford.