Ford Slashes Battery Orders After Incurring Massive Losses, Limited Demand For EVs From Consumers

Ford Motor Co. has begun to reduce orders from its battery suppliers as it deals with escalating losses in its electric vehicle (EV) division, according to a new report from Bloomberg.

According to insider sources, this move is part of a broader strategy to curtail spending on battery-powered models, delay new EV launches, and scale back planned battery plants.

As CEO Jim Farley recently admitted, Ford’s EV unit, Model e, is currently the primary burden on the company’s overall performance.

The decision to cut battery orders comes as a stark reminder of the challenges faced by automakers in the rapidly decelerating EV market.

Ford’s partnerships with South Korean suppliers SK On Co. and LG Energy Solution Ltd., as well as China’s Contemporary Amperex Technology Co. Ltd. (CATL), remain intact, but the company’s retrenchment of its EV strategy highlights the difficulties in navigating this evolving landscape.

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As EV prices have plummeted and consumer demand has waned, Ford’s losses per electric vehicle have skyrocketed.

In the first quarter alone, these losses exceeded $100,000 per vehicle, more than doubling the deficit from the previous year.

Bloomberg Intelligence analysts Steve Man and Peter Lau question the wisdom of heavy investments in EVs, noting that the anticipated losses in Ford’s EV unit this year could nearly negate the profits earned by its traditional internal combustion engine division, Ford Blue.

The ripple effects of this slowdown extend beyond Ford, impacting the entire EV supply chain.

Battery manufacturers in South Korea, China, and elsewhere are grappling with a surplus of unsold inventory, while key metal prices for lithium, cobalt, and nickel have plummeted to multi-year lows. This, in turn, has stalled investment decisions on new projects and even led to mine closures.

Ford’s predicament is an example of the unintended consequences of mandating consumer adoption of electric vehicles.

As governments and environmental activists push for a rapid transition to EVs, automakers are left to bear the brunt of the financial losses when consumer demand fails to materialize as anticipated.

The result is a market where few consumers are willing to purchase electric vehicles, leaving car companies with massive losses and an uncertain future.

Despite efforts to slash costs and remain competitive against market leader Tesla Inc., which has aggressively discounted its models, Ford continues to struggle in finding a path to profitability for its electric vehicles.

As John Lawler, Ford’s chief financial officer, stated during a recent earnings call, “We’ve seen prices coming down quite dramatically and that’s why we haven’t been able to keep up from a cost reduction standpoint.”

In an effort to address these challenges, Ford is fast-tracking the development of small, affordable EVs set to debut in late 2026.

CEO Jim Farley believes these models, starting at $25,000, will be profitable within their first year on the market.

However, the road ahead remains uncertain, as the company’s long-term survival hinges on its ability to stem the losses in its EV division.

As Lawler emphasized in a recent interview, “Model e has to stand on its own. It needs to be profitable and it has to provide a return on the capital we’re investing.”

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The question remains whether Ford, and the automotive industry as a whole, can navigate the treacherous waters of mandated EV adoption and emerge with a sustainable, profitable future.