Ford abruptly canceled plans to produce a three-row electric SUV and delayed construction of a new electric vehicle plant in Tennessee.
The pullback marks a major shift for the automaker amid a slump in demand for electric cars.
The elimination of the electric SUV and the withdrawal of its plans to build new plants could cost the automaker about $1.9 billion.
The automaker will reduce spending on electric vehicles to 30 percent of its annual investment, from 40 percent.
Ford will now focus on developing hybrid models, the company said Wednesday.
Ford has bet heavily on electric vehicles but expects to lose $5.5 billion this year
The new plant in Tennessee, which is still under construction, is intended to produce a new midsize electric pickup truck.
Ford said the shift in its EV strategy, including a rethink of its battery supply, is partly driven by the need to compete with lower-cost Chinese options.
Ford already expects to lose $5.5 billion at its electric vehicle unit this year alone.
“This is a radical change for us and we’re not going to make a radical change without doing a lot of investigative work to convince ourselves that this is exactly the right plan,” CEO Jim Farley said of the change.
“I have a lot of confidence,” he added.
Despite the setback, Ford’s electric vehicle business continues to grow, with its Ford F-150 Lightning the best-selling electric pickup truck in the country.
But Americans are increasingly put off by the cost of electric vehicles, concerned about their battery range and increasingly interested in hybrid models.
By focusing more on hybrid, longer-range and more affordable vehicles, Ford aims to alleviate these concerns and meet customers where they are.
“As America’s second-largest EV brand, we’ve learned a lot about what customers want and value, and what it takes to combine the best of the world with cost-effective design, and we’ve put together a plan that gives our customers maximum choice and plays to our strengths,” Farley said.
