Ford Motor Company reportedly plans to lay off a minimum of 1,000 employees and contract workers in North America as the automaker grapples with the financial challenges associated with its shift towards electric vehicles.
This move follows previous workforce reductions, including eliminating 3,000 jobs in the United States, with most of the cuts targeting engineering jobs.
Ford’s EV transition sparks major layoffs
Sources familiar with the matter revealed to the Wall Street Journal that Ford plans to implement these layoffs as it confronts the challenges of shifting its focus toward electric vehicles.
These investments coincide with the Biden administration’s push to accelerate the transition from polluting internal combustion engine (ICE) vehicles.
For context, the White House introduced the most stringent emissions standards ever proposed in April. The target is now at a 50% reduction in emissions from passenger cars and pickups between 2026 and 2032.
However, critics point to automakers’ financial realities in the electric vehicle market.
“Ford lost $34,000 per electric vehicle sold last year. EV economics have not improved in 2023. So…another mass layoff at Ford. No one should be surprised.
Government-designed and mandated industrial policy is bound to fail, especially when there is little consumer demand for the product and no underlying tangible rationale for it.”
Lawyer and longtime EPA critic Steve Milloy told National Review
Financial realities and roadblocks
The rapid shift towards EVs poses charging infrastructure challenges. In addition, concerns persist regarding the high costs of rare minerals necessary for EV batteries.
Apart from these, gas-powered vehicles continue to dominate the market, accounting for over 90% of new vehicle sales. This market dominance reflects the higher price tags associated with EVs, limiting their widespread adoption.
All that considered, Ford’s forecast for this year’s operating profit indicates an anticipated loss of $3 billion in its EV business. That loss is unsurprising, given how automakers face significant hurdles in reducing battery costs.
Ford CEO Jim Farley recently acknowledged that the cost of EV production may not be on par with that of an internal combustion vehicle until after 2030, as reported by the Journal.
Biden’s climate change agenda extends beyond EVs
President Joe Biden’s climate change agenda encompasses more than just promoting electric vehicles (EVs).
While the EV push remains a key component, other significant measures are also being pursued to address environmental concerns.
The Environmental Protection Agency (EPA) is poised to introduce stringent carbon limits for power plants to curb emissions from these sources.
Furthermore, the establishment of the White House Office of Environmental Justice highlights the administration’s commitment to addressing environmental inequalities. However, Biden faces challenges as he navigates a dispute with Senator Joe Manchin (D., W. Va.) over climate-related sections of the Inflation Reduction Act, further emphasizing the complexities of implementing climate policies.
See Also:
- Ford to eliminate 3,000 jobs in shift towards electric vehicles
- Ford plans layoffs to focus on electrification, incites unions in Europe
- Ford loses almost $60,000 for each EV sold
- Ford EVs to have access to Tesla Superchargers in 2024
- Ford forecasts a multi-billion dollar loss on its EV business in 2023
As Ford accelerates its efforts in the EV sector, the company continues to make difficult decisions to streamline operations and mitigate financial pressures.
The layoffs serve as a response to the challenges faced by the industry in reducing costs, ensuring infrastructure development, and stimulating consumer demand for electric vehicles. With these hurdles in mind, the future of the EV market remains a complex landscape that necessitates ongoing adjustments and strategic decision-making.
