A Ford Mustang Mach-E GT compact sport utility vehicle during the 2022 New York International Auto Show in New York on April 14, 2022.
Michael Nagle | Bloomberg | Getty Images
DETROIT – Ford engine CEO Jim Farley said Tuesday that the company is rethinking its electric vehicle strategies, including a “reassessment” of the need for vertical integration of batteries.
The Detroit automaker previously confirmed plans to delay or cut spending on all-electric vehicles by $12 billion. But what’s most detailed in Tuesday’s comments is Ford’s changing plans for electric vehicles, with sales growing slower than expected.
“One of the things we’re taking advantage of with some time delays is to rationalize the level and timing of our battery capacity to match demand and actually re-evaluate the vertical integration that we rely on and to rely on new chemicals and capabilities,” Farley said during the automaker’s fourth-quarter earnings call.
Farley reiterated that the company still expects electric vehicles to gain traction, but noted that widespread mass-market consumer adoption will not be achieved until costs become more in line with traditional vehicles. Electric vehicles are typically thousands of dollars more expensive than their gas-powered counterparts.
John Lawler, Ford’s chief financial officer, said that in addition to reassessing vertical integration in new battery chemistries, the company is also looking at adjusting installed production capacity to meet demand and potentially delaying next-generation electric vehicles “to ensure they meet our profitability criteria.” . given the new market reality.”
The company’s electric vehicle business, known as Model e, lost $4.7 billion last year, including $1.57 billion in the fourth quarter of 2023, offset by gains in the company’s fleet and traditional internal combustion engine units became. Both companies each earned more than $7 billion last year.
Lawler said Tuesday that the unit needs to be on its own “sooner rather than later.”
He also said the company has a target for its EV division that includes an 8% margin by 2026. At this point, the company had already set itself the goal of selling two million vehicles annually.
As Ford pulls back and reevaluates its electric vehicle business, the company intends to focus on selling hybrid vehicles, particularly trucks. The company expects its hybrid sales to rise 40% this year. In 2023, 133,743 hybrid vehicles were sold in the United States.
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2024-02-06 23:31:35
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