Title: Ford Slows Electric Car Rollout as Losses Mount: A Shift towards Hybrids
Ford, the US car giant, is reportedly reconsidering its electric vehicle (EV) rollout plans as it projects losses of over US$5.5 billion this year alone. The drop in demand for EVs in the US market has prompted Ford to delay some upcoming electric models and explore partnerships with external battery suppliers. However, the company remains optimistic about the potential of hybrid vehicles to meet customer demand and mitigate financial losses.
The Transition in the EV Market:
According to Ford CEO Jim Farley, the EV market has witnessed a significant transition over the past two years. Initially, customer demand outpaced supply due to production constraints, but now the market is saturated with high-priced EVs. As a result, Ford has made the decision to slow down its EV rollout and focus on developing more affordable models to compete with Tesla and Chinese OEMs.
The Focus on Hybrids:
Recognizing the changing landscape, Ford has delayed a planned US$12 billion investment in a new EV factory and is now prioritizing meeting US customers’ demand for hybrids. The company believes that offering a range of choices and flexible manufacturing will help navigate this transition successfully. Last year, sales of hybrid Ford vehicles increased by 25%, and Farley expects a further 40% increase this year, driven by the popularity of models like the Maverick and F-150 pickups.
Financial Security and ICE Business:
One of the reasons Ford can delay its EV plans is the strength of its traditional internal combustion engine (ICE) business. The financial security provided by the ICE side of the company serves as a safety net for the new technology ventures. This allows Ford to reassess its EV strategy and focus on developing competitive and cost-efficient models to tackle the emerging affordable EV market.
Ford’s decision to slow down its electric car rollout reflects the evolving dynamics of the EV market and the need to adapt to changing customer preferences. While the company acknowledges the importance of EVs, it is currently prioritizing meeting customer demand for hybrids. By developing more affordable EV models and leveraging its expertise in hybrids, Ford aims to remain competitive in the evolving automotive landscape.
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