Too expensive.That’s the reason Ford says it’s postponing USD$12 billion in EV spending despite receiving an almost equal amount of subsidies under the US government’s Inflation Reduction Act. That includes a planned 'mega' battery factory in Kentucky and associated manufacturing equipment.On Thursday, the company said it’s becoming increasingly clear customers just don’t want to pay steep premiums for the privilege of owning an EV over a comparably equipped internal combustion or hybrid option..Through the first three quarters Model e has lost about $4.5 billion despite 26% higher revenues..“We’re not moving away from our second generation [EV] products,” CFO John Lawler said in a media briefing Thursday to announce third quarter results, including a USD$1.3 billion loss in its EV business unit, dubbed Model e. Through the first three quarters Model e has lost about $4.5 billion.That was double what it lost a year ago, despite 26% higher revenues in the segment.And though it is continuing with plans to scale up its EV business, it plans to proceed at a more orderly and cost conscious pace. “We are, though, looking at the pace of capacity that we’re putting in place. We are going to push out some of that investment. The customer is going to decide what the volumes are,” Lawler said. “Ford is able to balance production of gas, hybrid and electric vehicles to match the speed of EV adoption in a way that others can’t.”."This is a pretty brutal space… I can hardly imagine the current status quo is fully sustainable for everybody."Mercedes CEO Harald Wilhelm.It follows similar moves by GM — which this week delayed the electrification of its best selling Silverado and Sierra pickup trucks — and Tesla, which delayed construction of a ‘giga’ factory in Mexico amid flagging demand and price wars among major manufacturers.Although EV sales continue to climb, demand has been slower than expected. And like Ford, Tesla boss Elon Musk has cited affordability as a major factor.On Wednesday, the head of German automaker Mercedes said EV margins are substantially lower than traditional internal combustion vehicles despite the higher price tags. Many manufacturers are barely breaking even or selling them below the cost of comparable ICE’s even though they cost more to make."This is a pretty brutal space," CEO Harald Wilhelm said. "I can hardly imagine the current status quo is fully sustainable for everybody.".Mercedes’ shares were down about 6% on Thursday, while Ford’s were down 10%. Tesla’s are down about 5% although they’re still up about 10% year to date.That’s prompted Toyota’s chairman Akio Toyoda — who has been critical of the industry’s singular focus on EVs — to tell reporters on Wednesday: “People are finally seeing reality.” Toyoda has long denied that electric vehicles are the only way for the automotive industry to achieve carbon neutrality and instead has explored other options as a way of preserving consumer choice and affordability. “There are many ways to climb the mountain,” he said.
