Significant EV investments
Ford’s investment of $7 billion is part of its previously announced $30 billion EV investment through 2025 and is the largest ever manufacturing investment at one time by any US automaker. Ford expects 40-50% of its global vehicle volume to be fully electric by 2030.
The company also plans to build three new BlueOvalSK battery plants that will enable 129 gigawatt hours a year of production capacity in the US. These battery plants will supply Ford’s North American assembly plants with batteries for the company’s electric Ford and Lincoln vehicles.
Demand for vehicles
The company is seeing strong demand for its Ford F-150 Lightning truck, E-Transit and Mustang Mach-E electric vehicles. Electrified vehicle sales in August were up 67.3% over last year. In its August sales report, the company stated that electrified vehicles are bringing in new customers to Ford at a rate that is more than 8 points higher than its overall conquest rate.
August sales of F-series totaled 57,321, reflecting a retail increase of 11% compared to July. Ford’s fully electric F-150 Lightning reservations have exceeded 130,000 while E-Transit has over 24,000 reservations.
Autonomous vehicles
Ford is making progress on its autonomous vehicles project. The company is working with Argo AI and Walmart (NYSE: WMT) to launch an autonomous vehicle delivery service in three cities in the US. These are part of the company’s efforts to roll out large-scale autonomous vehicle operations across a large number of US cities.
Business restructuring
Ford has been restructuring its business to focus more on its profitable vehicle models and markets. The company has exited several less profitable markets to shift its efforts to the prime ones. Earlier this month, Ford said it would stop vehicle production in India and would focus on growing its Ford Business Solutions capabilities in the country.
Despite significant investments, Ford has accumulated over $2 billion of operating losses over the past 10 years in India and the demand for new vehicles has been weaker than expected. These actions are expected to help the company focus on more lucrative markets and help drive growth.
All in all, Ford’s manufacturing and sales expertise gives it a significant competitive edge over the newcomers in the electric vehicle market. This is a good enough reason to be optimistic over the company’s growth prospects in this space.