Ford Motor Co F offered a glimpse into its electric vehicle roadmap during the company’s fourth-quarter earnings call on Tuesday.
Changing EV Market: CEO Jim Farley noted a “seismic change” in the EV market over the last six months of last year spurred by an intense price war among EV makers and a tremendous capital flow.
The company now has set targets involving the launch of its next generation of EVs, which Farley aims to make profitable within the first 12 months of their launch. However, the launch timeline might be subject to change as the launch would depend on assured profitability and return on investments.
Focus On Smaller EVs: Going forward, the company said it would continue making large EVs but they will be limited to geographies and product segments in which Ford is proficient such as trucks and vans. The company will, however, spend less capital on larger EVs and focus more on smaller EV products, Farley said.
The CEO noted that Ford’s EV teams are currently focused on cost and efficiency to withstand “ultimate competition” from American EV giant Tesla Inc and other Chinese EV makers who have more affordable offerings.
The company developed a “super-talented skunkworks team” to create a low-cost EV platform two years ago and they have developed a flexible platform that will be deployed to several types of vehicles, Farley said.
Scaling Hybrid Electric Vehicles: The company now intends to scale pure electric vehicles and hybrid electric vehicles simultaneously, a move that echoes rival General Motor‘s newest strategy.
“Hybrids will play an increasingly important role in our industry’s transition and will be here for the long run,” Farley said, adding that the margins on hybrids are closer to combustion vehicles and much higher than EV margins.
“We’re now the number one and number two best-selling hybrid trucks in the U.S. Maverick is number one and we’re the number three hybrid brand in the U.S. behind Toyota and Honda. But unlike them, our hybrids really sell best on trucks,” Farley said.
The company expects its global hybrid sales to be up 40% this year.
2024 EV Outlook: Ford expects losses to widen to a range of $5 billion to $5.5 billion for its electric vehicle segment Model-e this year, owing to pricing pressure and investment into its next generation of vehicles.
The Model-e EV business segment posted a full-year EBIT loss of $4.7 billion for 2023.
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