The US car company Ford will focus more on smaller electric cars in the future. The company is thus drawing the conclusions from its previous orientation, which recently caused Ford severe losses in the electric car division.
Smaller and cheaper electric cars will be at the center of the strategy at the US car giant Ford in the future. The group is thus reacting to changing demand from customers and ongoing losses in the division.
In the last quarter, Ford made an operating loss of $1.57 billion with purely electric vehicles. In contrast, the commercial vehicle business generated an operating profit of $1.8 billion. Ford also earned money from combustion engines and hybrid vehicles: operationally it was around $813 million.
Trend towards smaller vehicles across the industry
Accordingly, Ford now wants to initiate a strategic shift. Ford boss Jim Farley said that in the future Ford wants to invest more money in the development of smaller electric cars instead of large vehicles. He assumes that this will also be an industry-wide trend. It turned out that although customers were interested in electric vehicles, many did not want to pay a high premium for them. Group CFO John Lawler said on the financial broadcaster CNBC that Ford would adapt future investments in electric car production to demand.
There are apparently no doubts about the triumph of electric vehicles at Ford. According to company boss Farley, electric drives are the future, but it will take longer until they are accepted by a wider range of customers. From the group’s point of view, the transition to electric cars is inevitable. During the corona pandemic, the rapidly increasing electric car sales at the time fueled exaggerated expectations of future demand, said Farley.
Tesla and Chinese manufacturers are Main competitors
Ford sees competition primarily from the US manufacturer Tesla and in China. The cheaper Tesla model and vehicles from Chinese manufacturers would be “the ultimate competition” in the future. Tesla is expected to begin production of its new vehicle at the end of 2025.
In Germany, manufacturers have recently recorded only sluggish growth in electric car registrations. A total of 524,219 new electric cars hit the road last year, 11.4 percent more than the previous year, as the Federal Motor Transport Authority announced. The year before, the number of new registrations had increased by 30 percent. High car prices and the sudden end of the electric car subsidy are making the situation worse here, experts say.