Last week Ford CEO, Jim Farley announced its commitment to investing $29 billion in the electric and autonomous vehicle market up to 2025. In an interview with CNBC, he made it clear that Ford was ‘not going to cede the future to anyone.’
The announcement came as part of Ford’s fourth-quarter earnings report, which also outlined their plans to invest $7 billion in developing autonomous vehicles.
In 2020 Ford’s initial investment pledge in the EV market was $4.5 billion, which increased to $11 billion by 2022. This further increase demonstrates Ford’s determination to be a major player in the EV market and give companies such as Tesla, already the market leader, a good run for their money.
From Hybrid to All-Electric Models
While most of the vehicles it plans to produce will be battery-electric, they also plan to produce plug-in and hybrid models with traditional internal combustion engines. Unlike some of their rival’s Ford has not made any definite announcements as to when they plan to move to an all-electric fleet.
Ford is no stranger to the EV market. While their production of an all-electric Mustang has no doubt made petrol heads around the world shed a small tear, the Mach-E Mustang SUV has been described as ‘the most competent EV not made by Tesla or Porsche.’ Praise indeed. The Mach-E has already hit showrooms, so time will tell whether it can compete with Tesla’s SUV, the Model-Y.
The Shift to Electric Vehicle Production
Why the sudden decision to double their investment in this sector? The simple answer is that they have to. In November 2020, the UK Government announced their pledge to cease the sale of petrol and diesel cars by 2030. Along with Joe Biden’s commitment to addressing climate change, it is clear that car companies are going to have to invest heavily in the EV sector to compete in a meaningful way.
Competition from other manufacturers is also a huge incentive. Last week, General Motors announced that they plan to end production of all petrol and diesel-powered cars by 2035. It also plans to invest $27 billion in all-electric and autonomous vehicles by 2025, a figure remarkably similar to Ford’s pledge.
It’s certainly true that the all-electric offerings from Tesla currently dominate the EV market, but while their range of models currently outstrips those of any other company, plenty of other manufacturers are investing a great deal in improving their electric ranges.
GM, Toyota, and Volkswagen have all outlined plans to increase their EV models, and all three are pledging to offer customers luxury models, performance cars, and SUV’s as well as cars that offer all three attributes in one. Some might say that Ford has already achieved that with the development of the Mustang Mach-E.
Is Ford Ready to Dominate the EV Market?
Ford already dominates the commercial vehicle market, and this is where they will hope to have the edge on other manufacturers in EV sales. The Ford E-Transit van is due to hit the market later this year in the US and early 2022 in Europe. It has some impressive features, including fast charging (up to 80% in 34 minutes), and has an estimated WLTP range of up to 217 miles. With 25 different sizes, weights, and body variants, other manufacturers will be hard pushed to compete with Ford in this sector for some time.
Having already introduced the hybrid version of their best-selling F-150 pick-up, a fully electric version hits the showrooms in 2022. The fully battery-electric operated version, rumored to be sporting the name ‘EVerglades,’ loses none of the pick-ups trademark features. In particular, it will still have the ability to tow extremely heavy loads, as demonstrated in Ford’s video released last year, which shows its prototype model pulling 1.25 million pounds (naturally, the weight consisted of F-150’s).
While the all-electric F-150 is undoubtedly going to prove popular, there is competition out there. Although it might not appeal to the traditional pick-up truck customer, the futuristic-looking Tesla Cybertruck starts at a relatively affordable $40,000 with a 250-mile range and 7,500- pound tow capacity. General Motors is resurrecting the Hummer brand as both electric pick-ups and SUV’s and an electric Chevrolet pick-up is also in the offing. Whether any of these can compete with Ford in the pick-up stakes remains to be seen.
The Ford-Rivian Partnership
The Michigan based electric truck start-up Rivian, who could also be considered Ford’s competitor in the electric pickup truck market, could play a key role in Ford’s EV development. In 2019 Ford invested $500 million in the new company with the brief to build them an ‘all-new battery- electric vehicle.’ The original plan was to launch an electric version of Ford’s luxury Lincoln brand using Rivian’s ‘skateboard’ platform, but these plans have since been shelved, in part due to the Covid-19 pandemic.
Despite this, Ford is still committed to its partnership with Rivian. Rivian’s specialty is in electric adventure vehicles. It seems highly likely that any future collaboration with Ford will be along those lines. Rivian’s strong corporate message of promoting sustainable energy also sits well with Ford’s wish to be taken seriously in the EV market.
The Future of Ford’s Position in the EV Market
There is no doubt that electric vehicles are the future of car manufacturing, and Ford has their eyes on the prize. They are already making huge strides towards producing a competitive fleet of electric cars, which will appeal to customers loyal to their brand. Ford has a reputation for producing cars that are easy to maintain, reliable, and affordable. Their challenge now is to live up to that reputation, all the while fulfilling their commitment to producing the best electric cars possible.
The announcement of their huge increase in investment last week is as clear a sign as any of how serious Ford is about becoming market leaders in electric cars’ production. Their monopoly in the commercial vehicle sector and their focus on producing affordable electric transits and pick-ups is a tactic that is sure to put them ahead of the game. They certainly seem to be following the wise words of their founder Henry Ford when he said;
“The remains of the old must be decently laid away; the path of the new prepared.”