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America’s flagship automaker has all but given up on making consumer electric vehicles — for now, at least.
Well, that’s not good.
Ford Motor Company is canceling one of its most anticipated electric vehicles and delaying another EV project. The changes will cost at least $400 million — and as much as $1.9 billion — the company said Wednesday, and they signal that one of the biggest players in the American car industry still hasn’t yet found a workable EV strategy. With these new delays, the North American car market may not see the explosive growth of EV options — the kind of efflorescence already happening in Europe and China — until the end of this decade.
The primary car in question is Ford’s planned three-row EV crossover, possibly its most anticipated EV model. The new car, which was originally slated for release in 2023 before being bumped to 2025, will now be produced only as a hybrid. That fits in with Ford’s recent embrace of hybrids — by 2030, the company now says, it will offer a hybrid version of each vehicle in its line-up — but it deals a substantial blow to the company’s future EV offerings. Ford also announced that it will delay the release of a new medium-sized electric pickup truck to 2027. That truck, so far known only as “T3,” is meant to be the first product of the company’s California-based skunkworks staffed by Tesla alumni. That team is meant to help Ford develop a low-cost, globally competitive electric vehicle platform that could eventually undergird crossovers, trucks, and commercial vehicles.
Taken together, these changes mean that the company will offer no new electric vehicles in the consumer market for the next two years. Yes, the company’s outlook for EVs in the commercial market is a little brighter — Ford will begin selling an all-electric commercial van in 2026. But to entice the average buyer it will have to rely entirely on existing models — the Mustang Mach E and F-150 Lightning — to generate EV sales. The company will also cut back a quarter of its planned EV spending. It’s not an overstatement to say that Ford seems to be giving up on the consumer side of the EV transition until the back half of the decade.
“Ford has some improvements coming in 2026, but they’re basically throwing their hands up on the market,” Corey Cantor, an EV analyst at the market research firm BloombergNEF, told me. “They’re essentially ceding ground to other automakers in the U.S. market, and there’s a clear lack of plan for how they plan to stay competitive.
“There’s no way you can say it’s a good thing for the U.S. EV market,” he added.
Executives blamed the shifts on persistent challenges turning a profit in its EV unit, which has hemorrhaged money as it has spun up production, ultimately losing $130,000 on every EV that it sold during the first quarter of 2024.
“These vehicles need to be profitable, and if they’re not profitable based on where the customer is and the market is, we will ... make those tough decisions,” John Lawler, Ford’s chief financial officer, told the Financial Times. The company could not figure out how to reconcile the cost of the large battery needed for the three-row SUV with the vehicle’s size and price in a way that could turn a profit within 12 months, he added.
Ford’s approach may reflect a canny understanding of consumer demand in the American market. Although EVs are far better for the climate than gasoline-burning vehicles, hybrids pollute somewhat less than conventional gas guzzlers. Over the past few years, as new EV models have trickled into the market, hybrid sales have boomed, and that is, all things considered, a good thing: Replacing America’s fleet of gasoline-burning SUVs and crossovers with a hybrid fleet will still work to reduce emissions, although it will not allow for the extremely rapid emissions reductions that could keep the 1.5 degree Celsius warming goal in sight.
More pertinently, perhaps, the shift also creates a strategic opening in the American EV market. Tesla has long dominated U.S. market share, and in the past few years, Ford has settled into a comfortable No. 2 position. But Tesla has struggled with its own dearth of new models: Except for the luxury Cybertruck, the automaker has no new cars or trucks in its pipeline. And now that Ford appears to be taking a step back, the combined effect could create an opening for other automakers — namely Hyundai, Kia, or the startup Rivian — to step into the breach in 2025 and 2026. If Ford’s timeline holds, for instance, then Rivian will begin selling its widely awaited $45,000 R2 crossover in 2026, a year before Ford can offer anything new.
The shift also vindicates decision making at Ford’s cross-town competitor, General Motors. While Ford sought to take an early lead by manufacturing a few buzzy standalone EV models (like the Mach E), GM has focused on developing a robust EV platform, the Ultium. Although its initial Ultium-based releases had big deficiencies, its latest cars look better, and the platform should allow it to begin manufacturing a diverse lineup of cars and trucks in a relatively brief period of time. “For all the knocking we did of GM, their thinking makes sense: First you spin battery manufacturing up, then you put it in a lot of models, then you find out which models work” in the broader market, Cantor told me.
But perhaps the change in plans is most ominous for Ford’s cost model: If it can’t get a three-row crossover to pencil out, how can it get any kind of non-F-150 to work financially? Despite Ford’s struggles to make its three-row SUV concept work, other companies have already brought their own three-row electric vehicles to market. At the high end, Rivian’s R1T has three rows, starts at $69,000, and is the company’s best-selling vehicle. But Kia’s three-row EV9 starts at about $55,000 before subsidies, and Hyundai is due to start selling its own three-row SUV, the Ioniq 9, later this year. Other companies have found a way to make EVs without breaking the bank. Why hasn’t Ford?
But if Ford and GM’s behavior makes more sense for the wealthier and more cautious American consumer — in a country where public fast charger installation is still lagging — then it indicates, too, just how much America has fallen behind other global auto markets. On the same day that Ford backed off its multi-year EV goals, the Chinese tech giant Xiaomi announced that it had already beaten its annual target for EV sales and turned a profit while doing it. Xiaomi, BYD, and other Chinese automakers are rushing into the EV market, seemingly capable of producing more EVs, more cheaply and profitably, than their American competitors. Ford’s retrenchment into gas cars means that it has now fallen even further behind the global standard.
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Rob debriefs with colleagues on the latest climate news.
It’s been a busy few weeks for climate and energy. New York Climate Week brought hundreds of events — and thousands of people — to the city to discuss decarbonization and energy policy. The New Jersey governor’s race has raised the salience of electricity rates. And suddenly everyone is talking about energy affordability.
On this week’s episode of Shift Key, Rob is joined by his colleagues at Heatmap to discuss some of the biggest topics in energy and climate. What did they take away from New York Climate Week? What do the new politics of affordability mean for climate policy? And what are the benefits — and hazards — of arguing for climate policy by talking about how clean energy is cheap energy?
This Heatmap reporter roundtable features Heatmap’s deputy editor Jillian Goodman and its staff writers, Emily Pontecorvo and Matthew Zeitlin. Shift Key is hosted by Robinson Meyer, the founding executive editor of Heatmap, and Jesse Jenkins, a professor of energy systems engineering at Princeton University. Jesse is off this week.
Subscribe to “Shift Key” and find this episode on Apple Podcasts, Spotify, Amazon, YouTube, or wherever you get your podcasts.
You can also add the show’s RSS feed to your podcast app to follow us directly.
Here is an excerpt from our conversation:
Jillian Goodman: I want to back up a minute and just ask, what are we talking about when we’re talking about goldplating? What constitutes gilding the utility infrastructure, and what is not getting built because we’re doing all of this goldplating?
Matthew Zeitlin: Well, it’s funny, right? You’ll never read an IRP where they’ll be like, Alright, here’s our goldplated spending. What the advocates would say is that it’s often distribution, transmission and distribution spending that’s going across their territory and it’s not bringing down prices. I mean, again, it’s a completely subjective — well, not completely subjective. It is a subjective claim.
Goodman: Part of what’s motivating my question is, are we talking about things like installing smart meters?
Zeitlin: Well, in California, there’s been backlash to undergrounding. You know, it’s funny, because the utility structure makes it so anything good you want to do, the people have to pay for. So like even undergrounding electricity lines has become quite controversial in the American West because it’s so expensive.
Now, is that goldplating? Or is that climate resilience to decrease the chance of wildfires? Is it resilience? Is it building up climate resilience to the more wildfires caused by higher temperatures?
Emily Pontecorvo: I will just point out, it is also a policy choice by public service commissions and those who put people on those commissions to give the utility the rate of return that they get. There’s a lot of advocacy around lowering that rate of return, and also to put the degree of the cost of that goldplating on ratepayers that they do. They could have investors share more of that cost, and they’re just scared to do that. The utilities kind of scare them away from doing that. But it is possible. It’s in their power, at least.
Mentioned:
Everything that happened at Heatmap’s Climate Week event
Matthew on the peril for Democrats of running on electricity prices
Emily on the Greenhouse Gas Protocol
Arjun Krishnaswami in Utility Dive
Jillian’s downshift; Emily’s downshift; Matthew’s quasi-upshift; Rob’s downshift.
This episode of Shift Key is sponsored by …
Hydrostor is building the future of energy with Advanced Compressed Air Energy Storage. Delivering clean, reliable power with 500-megawatt facilities sited on 100 acres, Hydrostor’s energy storage projects are transforming the grid and creating thousands of American jobs. Learn more at hydrostor.ca.
Music for Shift Key is by Adam Kromelow.
More than a quarter say they’re being hit hard, according to a Heatmap Pro poll.
Most Americans say that rising electricity bills are having at least “a decent amount” of impact on their household finances, according to a new Heatmap Pro poll.
The poll, which surveyed more than 3,700 registered voters last month, gives context to how electricity prices have come to dominate national headlines in recent months — and why they’ve become an urgent issue at the state and local level in a few key regions.
On the 2024 campaign trail, President Donald Trump promised to cut voters’ power bills in half within a year of getting elected. So far, that hasn’t happened: Electricity prices have risen more than twice as fast as inflation over the past 12 months and are still rising, according to government data.
Voters are beginning to feel the squeeze from that inflation. In our poll, 26% of American registered voters said that rising electricity prices were having “a lot” of impact on their personal finances. Another 31% said that rising prices were having a “decent amount” of impact.
Still, for about 40% of the country, those high prices are more a pinch than a pain. Thirty percent of registered voters said that rising prices only had “a little bit” of impact on their personal finances, while 9% said they were having “none at all.” There wasn’t a significant partisan division in sensitivity to the high prices.
The survey did show some regional distinctions, however. In the Northeast, 63% of registered voters reported that rising power prices were causing them “a lot” or “a decent amount” of trouble. In the Midwest, only 52% of voters told the poll the same thing. The South, with 56%, and the West, with 61%, landed somewhere in between.
As might be expected, lower-income voters described more trouble. More than 70% of voters with household income below $50,000 a year said that rising power bills were having “a lot” of impact on their finances. Some 62% of voters earning less than $100,000 also described issues. So did 59% of white voters without a college degree.
The rising cost of power has become a major question in New Jersey’s political race, where it has haunted ads and led Representative Mikie Sherrill, the Democratic candidate, to promise to freeze power rates for a year if she is elected.
Energy Secretary Chris Wright has said that rising electricity costs are his No. 1 concern as energy secretary, although he has conceded the Trump administration is “going to get blamed” for surging power rates. The Trump administration has revoked permits for new offshore projects along the East Coast, and congressional Republicans have ended tax credits for solar and wind energy.
Wright told Politico in August that he blames “momentum of the Obama-Biden policies” for the surging power rates. Donald Trump was president from 2017 to 2021, after Obama and before Biden.
On Trump’s coal push, PJM’s progress, and PG&E’s spending plan
Current conditions: Tropical Storm Imelda is gaining wind intensity this week, bringing flooding rain and storm surge to the southeastern U.S. • Hurricane Humberto, now a Category 4 storm, is passing west of Bermuda, bringing marine hazards to the U.S. East Coast • Typhoon Bualoi is pummeling the Philippines and Vietnam, where it’s already killed a dozen people.
If you were planning to cash in on the $7,500 federal tax credit for buying an electric vehicle, you’d better make moves. Today’s the last day to claim the so-called 30D tax credit. Congress moved the expiration date for the writeoff to September 30 as part of the One Big Beautiful Bill Act.
That doesn’t mean all government incentives for EVs are going away. New York still offers a $2,000 “Drive Clean Rebate” for some vehicles, and California offers up to $7,000 in rebates. Prices for new electric cars are still higher than those for comparable internal combustion vehicles, a frustratingly persistent condition the federal tax credit was meant to help address. Owning an EV has its own rewards, however, including lower fuel and maintenance costs over time. For more on how to go about choosing an EV, here’s Andrew Moseman’s guide from our Decarbonize Your Life series.
Stacks at the Hugh L. Spurlock Generating Station in Maysville, Kentucky. Jeff Swensen/Getty Images
The Trump administration is opening more than 13 million acres of federal land to leasing for new coal mines. And it’s providing funding to keep demand for coal roaring. The Department of Energy announced Monday it will offer $625 million to upgrade, reopen, and “modernize” coal-fired power plants across the country.
It’s a sign of the trend Heatmap’s Matthew Zeitlin clocked in July: “Global coal demand is rising,” he wrote, “and America wants in.” Indeed, in a press release, Secretary of Energy Chris Wright boasted that the new funding would “keep our nation’s coal plants operating” and would ultimately help lower rising electricity prices. “Beautiful, clean coal will be essential to powering America’s reindustrialization and winning the AI race,” Wright said. “Coal built the greatest industrial engine the world has ever known, and with President Trump’s leadership, it will help do so again.”
The Trump administration is shutting down or shrinking roughly one third of the federal offices that track bird populations after hurricanes, map megafire risks in the Midwest, figure out new ways to fight invasive plants, and prepare communities’ stormwater drains against intense flooding. The U.S. Geological Survey’s Climate Adaptation Science Centers “are expected to drastically wind down and possibly close after Tuesday because of a lack of funds,” The Washington Post reported Monday. The centers in the South Central, Northeast, and Pacific Islands regions, which “collectively cover about one-third of the U.S. population and are funded under the Interior Department,” are potentially facing permanent closure.
The shuttering isn’t linked to a potential government shutdown, and appears planned as part of the Trump administration’s broader cuts to federal research. “We’re not willing to just drop everything and walk away,” Bethany Bradley, the co-director of the Northeast Climate Adaptation Science Center and a University of Massachusetts professor, told the newspaper. “But the reality is we can’t do this for free.”
Amazon, Google, Microsoft, utility giant Constellation, and power company Talen came together to propose a way to meet electricity needs in the nation’s largest power grid. Under their plan, the PJM Interconnection would allow large power users to volunteer for time-limited periods of reducing electricity demand when the grid is stressed. The proposal also outlines plans for time-limited use of backup generation. If making the load more flexible doesn’t work, PJM would increase the supply of firm power through procurement.
The pitch comes in response to an earlier mandatory curtailment proposal from PJM, which drew fierce blowback from many of the companies that wrote up this alternative. (“Everyone hates it,” Matthew wrote.) As analyst Aniruddh Mohan noted, PJM ultimately withdrew its initial load flexibility proposal.
Pacific Gas & Electric announced plans to spend $73 billion on upgrades to the electrical grid in California to meet the surge in demand from data centers. PG&E, as it’s known, has been deemed responsible for multiple large-scale wildfires in recent years, incurring billions in damages. As the utility told investors on a call Monday, the new investment plan “comes on the heels” of new liability reforms in the state. Under Senate Bill 254, the state expanded its wildfire fund by $18 billion and “acknowledged that the utilities and their customers cannot continue to carry the full burden of climate-driven catastrophic wildfires, especially when the utility has acted prudently,” PG&E CEO Patricia Poppe said, according to Power magazine. The utility had filed a proposal in March to build 700 miles of underground power lines between 2026 and 2028 and complete 500 miles of additional wildfire safety system upgrades by next year.
Fervo Energy, the company using fracking technology to harness the planet’s molten energy, is undeniably leading the race to commercialize next-generation geothermal. But a clear second-place contender emerged Tuesday when XGS Energy released the results from its first commercial test, the company told Heatmap exclusively. The startup’s system outperformed the executives’ expectations, setting the stage for full-scale development. While Fervo’s technology represents what’s known as “enhanced” geothermal system, XGS’ approach is what’s known as “advanced” geothermal systems that rely on closed-loop infrastructure, as Matthew previously explained.