Ford to double its investment in electric car development
DETROIT - Ford has announced a dramatic acceleration of its investment push into electric cars, and the carmaker also plans to deepen collaborations with technology giants on the increased digitisation of driving.
The company released its fourth-quarter and annual results on Thursday, and said it plans $22 billion (R330 billion) in electric car investment through 2025, nearly double the earlier plan.
The announcement is the latest big bet on electric cars by a legacy carmaker in the wake of upstart Tesla's growth and in anticipation of Biden administration initiatives to encourage emission-free vehicles.
Last week, Ford's rival General Motors set a target of having most of its fleet emissions-free by 2035.
"It's stunning how fast the industry is changing," said Chief Executive Jim Farley who pointed to surging electric car sales in Europe.
Farley reported strong early interest in Ford's Mustang Mach-E, its electric SUV which hit showrooms in December. The carmaker plans a range of all-electric vehicles, including a version of its best-selling F-150 pick-up truck.
"The costs are coming down quickly, but for me and the team, the move to electric is not about batteries and motors," Farley said on a conference call with analysts. "It's about a digital vehicle and a new customers experience."
The revamped plan came as Ford reported a fourth-quarter loss of $2.8 billion (R42bn), compared with a loss of $1.7 billion in the year-ago period.
However, Ford projected 2021 operating profits of $8 to $9 billion.
Teaming up with Google
Ford on Monday unveiled an alliance with Google to employ its cloud computing platform.
Farley said the Google venture is not "exclusive" and that Ford's vehicles would also employ Amazon's voice program and other programs by Apple and Microsoft.
"The technology partners are becoming more and more important for us to deliver the digital experience," he said.
Farley said the auto giant planned to take steps to lock in capacity of electric battery cells, recognising that supplies could be challenged as more rivals build electric cars.
Hit from semiconductor crunch
The motor industry is today facing a shortage of semiconductors following a surging demand for chips over the last year from customer electronics.
Ford projected annual operating profits could be dented by $1 to $2.5 billion due to lost auto sales connected to the semiconductor shortage.
Earlier on Thursday, Ford said it was trimming output of its F-150 because of the supply issue, following on the heels of other carmakers, including GM that announced it was shutting productions at three plants, and slashing output in half at another due to chip supply.
"We want to lock it up," Farley said of battery cell capacity. "We cannot afford to be in the situation we are with the semiconductors right now."