It is a business decision.
There is value in the Fiesta name - a generally well regarded car. Normally discontinuing a brand name would be negative associations with reliability, performance etc.
But Ford would also be considering whether a new and very different model should be clearly differentiated from its old technology. Many of their competitors will be launching new EVs with new branding.
They may prefer to position Ford as a brand with a future, rather than a legacy product deeply connected with the past. Advertising and marketing can send messages of new technology under a new name.
They may prefer to target a younger market who would associate the Fiesta name with their grandparents' generation. Concern for the environment is apparently stronger in younger age groups in the UK - perpetuating an ICE brand may have negative associations.
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