The US car giants rushed to equip their large vehicles with electric motors – but customers didn’t follow suit. Now there is a change in strategy.
The US car giant 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, said Ford boss Jim Farley on Tuesday. 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 corona pandemic, the rapidly increasing electric car sales at the time fueled exaggerated expectations of future demand, said Farley. Investments should now be more closely aligned with actual interest. The cheaper Tesla model and vehicles from Chinese manufacturers would become “the ultimate competition” in the future. Tesla is expected to begin production of its new vehicle at the end of 2025.
Ford also wants to save money by foregoing functions that are of little interest to customers. As an example, Ford manager Kumar Galhotra cited the automatic parking system, which “very, very few people use.” So Ford could remove the function – and save $60 per vehicle, which amounts to around $10 million a year.
The electric car division’s operating loss rose to $1.57 billion in the last quarter. In contrast, the commercial vehicle business generated an operating profit of $1.8 billion. Beyond that, Ford earned $813 million from combustion and hybrid vehicles.
Hybrid drives have become a bestseller for US car companies in recent months – also because they are cheaper than battery-powered vehicles. At the same time, Ford emphasizes that more electric models are also being purchased for commercial vehicles.
Ford posted a loss of $526 million (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 emphasized that the weeks-long strike by the US union UAW had cost the company $1.7 billion. Meanwhile, sales grew year-on-year from $44 to $46 billion, as Ford announced after the US stock market closed on Tuesday.
Ford shares rose around six percent in after-hours trading. The numbers were above analysts’ expectations.