The crux of the matter among automobile manufacturers is profitability. At the moment, many manufacturers are having difficulty making their electrification operations profitable. This is the case of Ford which, according to Boomberg would lose approximately $28,000 per vehicle sold, which is still little compared to the loss per vehicle of other brands.
According to Ford, the manufacturer will have lost $4.7 million in 2023 with electric vehicles; this figure could rise to 5.5 million this year. Ford has shelved its goal of achieving an 8% margin on electric vehicles by 2026.
Facing Tesla and Chinese brands
According to the American media Automotive News, Jim Farley, president and CEO of Ford, recently delivered a speech to analysts on the manufacturer’s financial results during the last quarter. He announced that Ford will review its electrification strategy in order to develop smaller, less expensive and more accessible electric vehicles in order to better compete with Tesla and Chinese manufacturers, but above all, in order to reduce the company’s financial losses.
The manufacturer therefore plans to move away from the production of large and expensive electric vehicles because the high prices of current models constitute the main obstacle to the adoption of electric vehicles by a larger part of the population.
Ford has created a small special team dedicated to the development of electric vehicles; it is led by a former Tesla executive who was hired by Ford two years ago. The idea is to develop a new platform that will make it possible to produce several types of vehicles in order to generate new profits.
“We are very far from our revenue potential,” Mr. Farley said. “All of our EV teams are focused on cost reduction and efficiency of our electric products as the rivalry will be with Tesla’s new affordable vehicles and other Chinese models. »
In December, Ford cut production in half of the F-150 Lightning electric pickup trucks and increased production of highly popular and profitable models including the Bronco and its Ford Ranger midsize pickup truck.
A return to hybrids
Mr. Farley also announced that he will continue to emphasize hybrid vehicles in response to increased buyer demand. He believes sales will grow 40% this year after a 25% jump last year.
Ford is on a tightrope and wants to achieve profitability with its battery electric vehicles, which is taking longer than expected.
Our opinion
Profitability remains the crux of the matter. Many people sometimes wonder why certain vehicles, although interesting and popular, disappear from the market. They are too complex, expensive to build and unprofitable. This is particularly the case with the Chevrolet Volt, a car that has never managed to break even.
