Ford ditches new EV in major strategy shift amid plummeting demand for electric cars

Ford has abruptly cancelled plans to produce a three-row electric SUV, and has delayed building a new EV plant in Tennessee. 

The pullback marks a major shift for the car company, amid tumbling demand for electric cars. 

Axing the electric SUV and pulling back on its new plant plans could cost the carmaker around $1.9 billion. 

The manufacturer will also drop its spending on EVs to 30 percent of its annual investment, down from 40 percent. 

Ford will now focus on developing hybrid and more affordable models, the company said on Wednesday.  

The now-delayed plant in Tennessee, which is still under construction, is meant to be producing a new midsize EV pickup. 

Ford already expects to lose $5.5 billion from its EV unit this year alone. 

'This is a tremendous pivot for us, and we're not going to make a tremendous pivot without doing a lot of homework to convince ourselves this is the exact right plan,' CEO Jim Farley said of the shift. 

'I'm very confident,' he added.

Ford said shifting its EV strategy, including rethinking its battery-sourcing, is in part due to the need to compete with lower-cost Chinese options. 

'An affordable electric vehicle starts with an affordable battery,' Farley said. 'If you are not competitive on battery cost, you are not competitive.' 

Despite the pullback Ford's EV business continues to grow, with its Ford F-150 Lightning the best-selling electric truck in the country.

Yet Americans are increasingly put-off by the cost of EVs, concerned by their battery range and increasingly interested in hybrid models. 

By focusing more on hybrids, longer ranges more affordable vehicles Ford is aiming to assuage these concerns and meet customers where they are. 

'We learned a lot as the No. 2 U.S. electric vehicle brand about what customers want and value, and 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,' Farley explained.