According to Bloomberg, Ford has begun cutting orders from battery suppliers to stem the losses.
Quoting officials, Bloomberg reported that the company "have slashed thousands in costs from their EVs to try to make them profitable, but they’ve also had to slash prices to remain competitive against market leader Tesla Inc., which has aggressively discounted its models".
Ford is also fast-tracking the development of small EVs that will start at USD 25,000 and debut in late 2026, Bloomberg has reported.
Last month, CEO Jim Farley said EVs are "a huge drag not just on Ford, but on our whole industry".
The carmaker recorded a USD 1.3 billion operating loss for its EV and software division in the first quarter. More broadly, executives expect this section of the company to sustain a pre-tax loss of between USD 5 billion to USD 5.5 billion for the year.
In the near term, hybrids are a top priority for Ford to ease customers into a battery-powered future, and the auto company aims to increase hybrid sales by 40% this year and quadruple them in the coming years.
Farley said he has walked back some of the Ford's EV ambitions to better match consumer demand. This month, Ford delayed the planned launches of three-row EVs in Canada and its next-generation electric pickup truck built in Tennessee. Executives have said they will not launch the next generation of Ford’s EVs until they can be profitable.
The EV business has proven tough not just for legacy automakers like Ford, but also for pure EV players like Tesla.
Elon Musk's company recently laid off 10% of its global workforce and on Tuesday posted the first decrease in quarterly revenue since the pandemic.
Ford expects EV production costs to come down, but to be largely offset by intense pricing pressure from industry competitors, said Chief Financial Officer John Lawler.
"The last 12 to 18 months, it's just been a continuous march down on the top line, which is offsetting any of the savings we've had from a cost standpoint," he said of the EV business.
Ford is also shifting focus to producing larger electric trucks and SUVs, as well as affordable and smaller EVs that are being developed by a “skunkworks” team in California.
The company posted a rare 13% drop in quarterly revenue for its gas-engine business, which the company blamed on the launch of the new F-150 pickup truck.
The automaker will likely have slower, more deliberate launches in the future in its effort to root out costly quality issues, executives said.
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