Ford to Revamp EV Strategy Amid Declining Profitability

Ford is planning to revamp its battery electric vehicle strategy amid declining profitability. The company is expected to unveil a new battery electric architecture, which could be a game-changer for the automaker. CEO Jim Farley has compared the new strategy to the "Model T moment," hinting at a potential rebirth for the company. The move aims to improve profitability and capitalize on the growing demand for electric vehicles.

Ford Motor Company (F) is set to unveil a revamped battery electric vehicle (BEV) strategy on August 11, aiming to boost profitability and capitalize on the growing demand for electric vehicles (EVs). CEO Jim Farley has described the upcoming announcement as a "Model T moment," signaling a potential transformative shift for the automaker.

Farley has been vocal about Ford's admiration for Chinese tech and has cited Chinese automakers like Geely and BYD as benchmarks for Ford's next generation of EVs. He believes that Ford must re-engineer and transform its engineering supply chain and manufacturing processes to effectively compete with Chinese automakers' cost competitiveness and innovation pace [1].

The new strategy includes a switch to Lithium Iron Phosphate (LFP) battery chemistry, which is less energy-dense but more affordable and suitable for mass-market models. This move is a departure from Ford's current use of Lithium Ion batteries, which rely on nickel, cobalt, and manganese. The LFP technology is licensed from CATL, a China-based global leader in batteries for BEVs [2].

Farley has also emphasized the importance of partnerships in the EV sector, noting that differentiation is becoming increasingly difficult due to the commoditization of technology and supply chains. Strategic alliances will be crucial for Ford to remain competitive [1].

The new strategy comes amid declining profitability, with Ford's Q2 financial report indicating a net loss of $36 million, primarily due to special charges related to a field service action and expenses related to a previously announced cancellation of an electric vehicle program. The company's full-year EBIT is now anticipated to be $6.5 billion to $7.5 billion, down from the earlier guidance of $7 billion to $8.5 billion [2].

Ford is also planning to leverage the relaxation of clean air and fuel efficiency rules by the Trump administration to increase the capacity and availability of gasoline engines. This move could drive substantial profit to the bottom line, as federal rules, penalties, and guidelines had previously made the production and sale of powerful gasoline engines too costly [2].

The new BEV strategy reflects a broader industry reality: traditional automakers must swiftly adapt their operational and manufacturing strategies to navigate an increasingly competitive and geographically segmented automotive landscape. While Ford faces challenges, such as import tariffs and unresolved quality problems, the company's operations in the U.S. are positioned to benefit from the latest relaxation of clean air and fuel efficiency rules.

References:
[1] https://www.carscoops.com/2025/08/after-driving-chinese-evs-jim-farley-prepares-for-fords-model-t-moment/
[2] https://seekingalpha.com/article/4807956-ford-set-to-revamp-battery-electric-vehicle-strategy-amid-declining-profitability