Ford has cancelled plans for an all-electric three-row SUV, citing low consumer demand and a crowded electric vehicle (“EV”) market. This decision follows a trend of automakers scaling back their EV production goals due to slower-than-expected sales growth.

The news that Ford was scrapping its SUV EV came just a month after the company announced it was switching the manufacturing at its plant in Oakville, Ontario, which had been earmarked for EV production, to Ford’s F-series pickups, its flagship fuel-powered trucks.

“The move,” the New York Times reported, “is the latest example of how automakers are pulling back on aggressive investment plans in response to the slowing growth of electric vehicle sales.”

Several factors contribute to the low demand for EVs, including high prices, range anxiety and a lack of charging infrastructure. EVs are significantly more expensive than comparable fuel-powered vehicles, and the price gap is widening. Consumers also express concerns about limited driving range, particularly in cold weather, and the availability of charging stations.

Ford’s aggressive push into EVs, driven in part by government incentives and pressure, has resulted in significant financial losses.

“The costs of listening to industry experts and politicians in Washington instead of consumers – and profits – have been severe,” the American Institute for Economic Research (“AIER”) said. 

The company lost billions of dollars on EV sales, selling each unit at a substantial loss. Ford reported a loss of $4.7 billion on EV sales in 2023, roughly $40,525 per vehicle sold.

It highlights the importance of meeting consumer demand in a free market economy.

“Ford’s massive pullback from EVs is part of a broader return to economic reality. Companies flourish in a free market economy not by serving bureaucrats but consumers, the true ‘bosses’,” AIER wrote.

As economist Ludwig Von Mises wrote, “The real bosses, in the capitalist system of market economy, are the consumers.  They, by their buying and by their abstention from buying, decide who should own the capital and run the plants.  They determine what should be produced and in what quantity and quality. Their attitudes result either in profit or in loss for the enterpriser. They make poor men rich and rich men poor.”

Automakers are paying the price for their poor decisions in the form of losses.  But were not for the federal government’s attempts to coerce Americans into EVs – which included taxpayer-funded subsidies, overt pressure from Washington and federal regulations designed to phase out fuel-powered cars – misallocation of resources likely could have been avoided.

Forcing Americans into EVs was always a bad idea economically, but it now appears to be a bad idea politically, too.  A spokesman for presidential candidate Kamala Harris recently told Axios that she “does not support an electric vehicle mandate.”

“The centrally planned EV revolution now appears dead in the water, or at least in full retreat,” AIER concluded.

The above is a précis of the article ‘Ford’s Massive Retreat From EVs, Explained’ published by AIER.  You can read the full article HERE.

Featured image: Ford’s Mustang Mach-E, an all-electric SUV, already faces supply chain concerns, compliance costs, and price competition. Its planned three-row successor has been cancelled. Source: AIER