The American car giant Ford wants to invest more money in smaller electric cars in the future. Ford CEO Jim Farley said Tuesday that he expects this to be an industry-wide trend as well. He also wants to save on some features.
Ford boss: from the company's perspective, the transition to electric cars is inevitable
It turned out that although customers were interested in electric vehicles, many did not want to pay a high premium for them. At the same time, the Ford boss reiterated that the transition to electric cars was inevitable from the company's perspective.
During the coronavirus pandemic, the rapid rise in electric car sales at the time fueled exaggerated expectations about future demand, Farley said. Investments should now be more aligned with real interests. The cheaper Tesla model and vehicles from Chinese manufacturers would be “the maximum competition” in the future. Tesla is expected to begin production of its new vehicle in late 2025.
Automatic parking could be dispensed with
Ford also wants to save money by giving up features that are of little interest to customers. Ford CEO Kumar Galhotra cited as an example the self-parking system, which “very, very few people use.” Thus, Ford could eliminate the feature and save $60 per vehicle, which is equivalent to about $10 million per year.
The electric car division's operating losses amounted to $1.57 billion in the last quarter. By contrast, the commercial vehicle business generated an operating profit of $1.8 billion. Beyond that, Ford earned $813 million (€754 million) with combustion engines and hybrid vehicles.
Hybrid engines have become a bestseller for American car companies in recent months, also because they are cheaper than battery-powered vehicles. At the same time, Ford highlights that more electric models are also being purchased for commercial vehicles.
UAW strike costs companies $1.7 billion
Ford recorded a loss of 526 million dollars (around 489 million euros) in the last quarter. In the same quarter last year, a profit of around $1.3 billion was recorded. However, Ford management highlighted that the several-week strike by the American union UAW had cost the company $1.7 billion (€1.57 billion). Meanwhile, sales grew year-over-year from $44 billion to $46 billion, as Ford announced after the U.S. stock market closed on Tuesday.
Ford shares rose about six percent in after-hours trading. The figures exceeded analysts' expectations.