The Ford F-150 Lightning was displayed at the Philadelphia Auto Show in Jan. 2023, in Philadelphia. Ford is revamping its money-losing electric vehicle business, retreating from some plans for all-electric vehicles and instead prioritizing the development of hybrid technology, the automaker announced on Wednesday.  Matt Rourke/Associated Press file

Ford is revamping its money-losing electric vehicle business, retreating from some plans for all-electric vehicles and instead prioritizing the development of hybrid technology, the automaker announced Wednesday.

The announcement underscores the challenges facing U.S. automakers as they seek to boost sales of EVs, a crucial technology in the fight against climate change, despite flagging consumer demand, supply chain challenges and increased competition with Chinese carmakers.

Ford is scuttling plans for a three-row electric SUV and spending less of its total resources on all-electric vehicles, with annual capital expenditures dedicated to pure EVs declining from about 40% to 30%.

Still, executives said production will begin on an all-electric commercial van in 2026. The automaker also has plans for two more electric pickups and long-range SUVs.

Ford is responding to consumer preferences, company executives said, as many drivers remain concerned about a lack of EV charging infrastructure and affordable EV models.

“We learned a lot … 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,” chief executive Jim Farley said in a statement.

Ford is shifting to hybrid technologies for its next three-row SUVs and will take a $400 million write-down for “certain product-specific manufacturing assets,” the automaker said in a news release. The company warned that it may also see “additional expenses and cash expenditures” of up to $1.5 billion.

“We could not put together a vehicle that met our requirement of being profitable in the first 12 months,” Chief Financial Officer John Lawler said on a Wednesday call with reporters and analysts. “If these vehicles are not profitable based on where the customer is, we will pivot and adjust and make those tough decisions, and that’s what we’ve done.”

The announcement deals another blow to President Biden’s ambitious goal of electric vehicles and plug-in hybrids accounting for half of new car sales by 2030. It comes as EVs have emerged as a flash point in the 2024 election, with former president Donald Trump repeatedly bashing the technology.

“Unfortunately, the administration’s goals of getting to over 50% market share for EVs by the end of the decade were always bit overoptimistic as were the announced targets by most automakers including Ford, [General Motors] and Stellantis,” Sam Abuelsamid, an auto analyst at the market intelligence firm Guidehouse Insights, said in an email.

“The inability of Ford to develop a competitive, profitable lower-cost EV in the near term is likely to be a major challenge going forward as it faces increased competition from the likes of Hyundai and Kia as well as the future potential from Chinese [automakers],” Abuelsamid added.

Though electric vehicles have come down in price, industry data show they still command higher upfront costs. In the past two years, the average price of an EV fell $8,500, or 13.1%, to $56,520, according to Cox Automotive. However, that number does not account for tax credits. By comparison, a new gas-powered or hybrid will run about $47,800.

“I think we will see that [EV] price continue to go down,” said Stephanie Valdez Streaty, director of strategic planning at Cox Automotive.

The outcome of the election has important implications for federal EV policies, including a tax credit of up to $7,500 for EV buyers. During a campaign stop in Pennsylvania on Monday, Trump said he had not made “any final decisions” on the subsidy.

“I’m a big fan of electric cars, but I’m a fan of gasoline-propelled cars, and also hybrids and whatever else happens to come along,” Trump said.

Ford also said Wednesday that it is delaying production of an electric pickup truck at a Tennessee plant to 2027. Production at the new $5.6 billion plant outside Memphis was initially expected to begin next year.

“In effect, this shifts back a new generation of Ford EVs from 2025 to 2027 – at the very least,” said Corey Cantor, a senior associate for EVs at BloombergNEF, an energy research organization.

Ford’s website still proclaims “the electric era is here,” touting fully electric models like the Mustang Mach-E and the F-150 Lightning pickup. But the company’s electric division reported a $1.1 billion loss, which it attributed in part to “ongoing industry-wide pricing pressure on first-generation electric vehicles.” Sales of the company’s hybrid vehicles, led by the F-150 and Maverick pickups, were up 34% in the second quarter of 2024 compared with the same period last year.

Farley said in a recent call with investors that his company has learned from its EV losses and will need to be more disciplined moving forward.

“This means we will not launch vehicles at a loss that are not good for our business, knowing what we know now about the reality of the market equation,” Farley said.

Ford shares ended Wednesday’s session at $10.85, up 1.6%. The stock is off 10.8% year-to-date.