The Strategist

Ford Motor bets everything on electric cars

01/15/2018 - 13:51

Chairman of the Board of Directors of Ford Motor Bill Ford said that the company intends to significantly increase investment in the development of electric vehicles. According to him, the volume of funds invested by the concern in this sphere will amount to $ 11 billion by 2022, which is much more than sums that were voiced by company representatives earlier.

At the Auto Show in Detroit, Ford Motor Board Chairman Bill Ford told about the company's plans for the coming years. The main goal of the company is to make almost all models of their cars either fully or partially electric.

Earlier Ford announced plans to spend about $ 4.5 billion by 2020 on the development of electric vehicles. Now the plans of the concern look much more ambitious: Mr. Ford said that by 2022, 40 cars from the entire lineup of the auto concern will be either fully electric (16 such models), or equipped with a hybrid engine. The American manufacturer intends to spend $ 11 billion make this idea reality.

"The $ 11 billion means that we bet everything on electric vehicles, Mr. Ford said. The only question is whether our rush will be supported by customers. We think so."

Ford decided on a radical change in the direction of development last year, after Tesla outstripped the representative of the "Detroit’s Big Three" by the market capitalization. The company reacted to this with introducing Jim Hackett as a new CEO of the company, who replaced Mark Fields in this post. Mr. Hackett immediately promised to cut the company's expenses (by $ 14 billion over the next five years), and also concentrate on off-road vehicles, trucks and electric vehicles.

The transition to a new development strategy is facilitated by external factors. The authorities of China, Europe and, for example, California, are tightly regulating the car industry, forcing manufacturers to reduce the level of harmful emissions of cars. Some countries even define the time when the sale of cars with gasoline and diesel engines will be banned. At the same time, the cost of batteries for cars is gradually decreasing, and their power is growing.

In this scenario, automakers are massively changing their priorities. So, all the largest car companies have already announced plans of aggressive expansion of the line of cars with electric or hybrid engines. Last year, General Motors promised to add 20 new models of electric vehicles and fuel cells auto by 2023. Volkswagen in November announced plans to spend $ 40 billion in the next five years on the development of electric vehicles and unmanned vehicles. And in late December, Toyota also voiced its plans in this area. By the beginning of the 2020s, the company intends to add at least 10 new models of electric vehicles to its lineup.