Ford estimates battery-electric vehicles to account for 40% of total sales by 2030, as it invests billions in research and development.
In a presentation to investors on Wednesday, the manufacturer stated that it will increase its EV development investment by nearly $8 billion from this year until 2025. This takes the overall investment to about $20 billion as Ford begins to develop and produce batteries in a joint venture with South Korean firm SK Innovation.
“Today is show, not tell time, for the Ford team,” Ford CEO Jim Farley said at the start of the presentation.
Ford unveiled two new electric vehicle platforms designed to handle pickup trucks, commercial vehicles, and SUVs like the Ford Explorer. It also stated that smaller vehicles in Europe will be based on Ford partner Volkswagen’s underpinnings. Information about when the new electric vehicles will be available for purchase wasn’t given.
A large portion of the 40% electric vehicles sales will come from Europe, as the company has planned to switch its entire passenger car line to electrical energy by 2030 there.
To fight global warming, the global auto industry and government policymakers are attempting to shift from internal combustion engines to electric power. Some European countries, as well as California, intend to fade out petroleum-powered vehicles, while President Joe Biden has promised billions of dollars in charging stations, as well as tax breaks and refunds, encouraging people to switch.
Farley also noted that while Ford’s financial performance has not been satisfactory in recent years, the company has expedited its turnaround strategy and achieved progress in recent quarters. According to him, the company is currently generating income in order to broaden the range of its electric and commercial vehicle operations.
In addition, the company revealed the creation of a new business named Ford Pro, which would focus on government and commercial fleet purchasers. It predicts that the company’s yearly sales would increase to $45 billion by 2025, from $27 billion in 2019.
Ford wants to introduce a new rear-drive, all-wheel-drive electric vehicle architecture to implement a new generation of high-sales cars, including an electric Ford Explorer SUV and other bigger SUVs with two and three rows of seating.
According to Hau Thai-Tang, the company’s product development head, the company plans additional cargo vans and pickup trucks based on the new structure, and it estimates one-third of pickup truck sales to be totally electric by 2030.
Ford’s Chief Operating Officer Lisa Drake said that by producing electric versions of its top-selling models, the Mustang, F-150, and Transit van, the company can bring mass purchasing power to EVs that smaller companies cannot.
She said that 70% of Mustang Mach-E electric SUV purchases came from other vehicle manufacturers, demonstrating that EVs will help Ford grow sales.
She also noted that Ford predicts battery costs to fall from $140 per kilowatt-hour to under $100 by 2025, and $80 by the end of this decade.
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As a demonstration of the turnaround strategy’s success, Chief Financial Officer John Lawler stated that overseas operations, including Europe, China, and South America, had lost more than $2 billion a year for the previous two years, but earned a $500 million profit in the first quarter.
The additional $8 billion in electric car expenditure would go toward the recently established joint venture with SK Innovation to develop and produce batteries. By the middle of this decade, the partnership is going to build two North American plants capable of producing batteries for around 600,000 electric vehicles per year. The companies said that they have signed a memorandum of agreement, but specifics on the ownership structure and plant sites have still to be worked out.
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