Ford Expands EV Strategy to Boost Energy Efficiency
Ford Motor Company is strategically expanding its electric vehicle (EV) approach to offer more energy-efficient options, aiming to make EVs more accessible and affordable for a wider audience.
By updating its North American vehicle lineup, Ford is focusing on enhancing energy efficiency while giving customers greater choices in the electric vehicle market.
Central to this strategy is the introduction of a new high-tech electric commercial van in 2026, followed by two advanced electric pickup trucks in 2027. These additions are part of Ford's broader plan to develop more affordable and energy-efficient EVs.
The company is also revising its US battery sourcing strategy to reduce costs and ensure efficient use of production capacity, all to support current and future EV production.
Innovating for energy efficiency in a competitive market
Ford President and CEO Jim Farley emphasised the company's commitment to energy-efficient innovation.
“We are committed to innovating in America, creating jobs and delivering incredible new electric and hybrid vehicles that make a real difference in CO₂ reduction.
“We learned a lot as the number two US electric vehicle brand about what customers want and value, what it takes to match the best in the world with cost-efficient design and we have built a plan that gives our customers maximum choice and plays to our strengths.”
As the global EV market evolves, with competition increasing from Chinese manufacturers who leverage cost advantages and advanced technologies, Ford recognises the need to stay ahead. Today’s EV buyers are more focused on energy efficiency and cost savings, such as reduced fuel and maintenance expenses, compared to the early adopters.
With new EV models emerging and stricter regulations being implemented, Ford faces increasing pressure to keep costs competitive while delivering energy-efficient vehicles.
Ford’s roadmap to sustainable, energy-efficient growth
John Lawler, Ford’s Vice-Chair and Chief Financial Officer, said: “We’re committed to creating long-term value by building a competitive and profitable business.
“With pricing and margin compression, we’ve made the decision to adjust our product and technology roadmap and industrial footprint to meet our goal of reaching positive EBIT within the first 12 months of launch for all new models.”
A significant shift in Ford’s strategy includes the decision to incorporate hybrid technology into its upcoming three-row SUVs rather than making them fully electric. This change is driven by the need for energy efficiency and cost-effectiveness. Consequently, Ford will write off approximately US$400m in non-cash costs related to manufacturing equipment for the now-cancelled all-electric three-row SUVs.
This adjustment could also result in up to US$1.5bn in additional costs, which Ford will report as a special item in the quarter when these costs arise.
Ford's next wave of energy-efficient EVs will commence with a commercial van, set to be produced at the Ohio Assembly Plant in 2026. Ford already leads in the commercial EV space, particularly with the E-Transit, the top-selling electric van in the US. Commercial customers are rapidly transitioning to EVs, driven by the significant energy and cost savings these vehicles offer, alongside increased productivity.
Transforming EV development for greater energy efficiency
In 2022, Ford established a dedicated team in California to revolutionise how it develops energy-efficient EVs and reduce associated costs. This team uses a systems-integration approach, working across design, engineering, supply chain and manufacturing to streamline processes and drive down expenses.
“We recruited the most technically skilled and creative professionals from inside and outside Ford to drive a radical change in how we develop an electric vehicle,” Jim added. “The work of this highly talented team has evolved into a critical enabler of our electric vehicle strategy. These electric vehicles will be lower cost, and not compromised in any way.”
A core aspect of Ford’s energy-centric EV strategy is its battery technology. “An affordable electric vehicle starts with an affordable battery,” he continued.
Ford has adjusted its battery sourcing strategy to support not only its EVs but also new electrified vehicle types, aiming to reduce costs and increase energy efficiency. This adjustment will also ensure that Ford qualifies for tax credits under the Inflation Reduction Act.
This energy-efficient battery strategy includes shifting some Mustang Mach-E battery production from Poland to Michigan in 2025. The BlueOval SK joint venture's Kentucky 1 plant will begin battery cell production in mid-2025, supplying cells for the current E-Transit and F-150 Lightning, resulting in significant cost and energy savings.
By late 2025, BlueOval City in Tennessee will start producing battery cells for Ford’s new electric commercial van and next-generation electric truck, as well as other future electrified vehicles.
Looking ahead, Ford plans to begin production of lithium iron phosphate (LFP) batteries in 2026 at BlueOval Battery Park Michigan, the first automaker-backed LFP battery plant in the US. This development is set to enhance energy efficiency and lower costs, helping Ford deliver some of the most affordable and energy-efficient battery cells in North America.
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