Ford faces significant challenges as the industry transitions to electric vehicles, prompting the company to focus on its hybrid offerings as a key strategy. Ford is scaling back its transition to electric vehicles to hedge bets on hybrids, mirroring Toyota’s strategy.
Ford’s electric vehicle (EV) sales have reached an unprecedented high, with 8,958 units sold in November alone; however, the company is now reining back its efforts.
Ford purchased additional F-150 Lightning models last month (4,393) than it did throughout its entire third quarter (3,503). As the market leader in the US, the Lightning held off Rivian’s R1T to claim the top spot as the best-selling electric pickup through November.
Ford’s CEO Jim Farley stated during the company’s Q3 earnings call that he is “thrilled we’ve got a chance to refocus our efforts on improving our internal combustion engine and hybrid electric vehicle product lines as we navigate a shifting market.”
Farley emphasized that Ford Blue, Ford’s internal combustion engine enterprise, will be robust and continue to grow in the years ahead.
Despite remaining “bullish” on its Mustang Mach-E and electric vehicle plans, the automaker’s CEO acknowledged that the market remains a “moving target.”
Ford will intensify its focus on internal combustion engines (ICEs) and hybrid vehicles.
Ford recently reinvigorated its electric vehicle (EV) strategy with several new initiatives. Ford’s Chief Financial Officer, John Lawler, noted the company is scaling back investments, including approximately $12 billion in electric vehicle (EV) expenditures.
Lawler reiterated the stance final month on the 2023 Barclays International Automotive & Mobility Convention. The corporation shows no inclination to modify its approach, merely tweaking the pace and flow of capital and resources deployed.
The company is cutting production by approximately 50% at its Marshall facility, reducing the capacity of inverters and motors, and revising its strategy for integrating production vertically.
The head of Ford’s finance department highlighted the company’s plan to focus on hybrid vehicles as a transitional step towards fully electric cars. The automotive industry mirrors Toyota, whose reputation for prioritizing hybrids has been well-established. Despite plans to accelerate its electric vehicle (EV) rollout in the coming years through technological advancements, Toyota’s current EV sales are underwhelming, comprising a mere 1% of its overall volume as of last month.
Ford’s hybrid efforts were criticized by Lawler for being slightly complacent. As he noted, hybrid vehicles have always played a significant role in the mix, and with electric vehicle (EV) adoption proceeding more slowly than expected, hybrids will comprise an even larger proportion.
Electrek’s Take
As Ford’s chief financial officer overlooks a crucial trend – electric vehicle (EV) adoption shows no signs of abating. Current analysis suggests that claims about the experiences of an electric car slowdown have been significantly overstated.
Passenger electric vehicle (EV) gross sales are projected to reach a record-breaking 14 million units in the current year, a remarkable 35 percent increase over the previous year’s figures. In the United States, Ford’s leading market, growth is accelerating at a remarkable pace, with a projected 50% increase expected for the year.
As reported, traditional automobile manufacturers have introduced products that are “non-aggressive on price, quality, or options.” This development has enabled electric vehicle (EV) makers such as Tesla, Rivian, and BYD to continue their upward trend in market share. Electric vehicle (EV) leaders, including Tesla, BYD, and Li Auto, are poised to capture a significant share of the global automotive market, accounting for approximately 7% of total car sales this year, a remarkable increase from just 1% in 2020.
Legacy automakers, such as Hyundai and Volvo, are investing heavily in electric vehicles (EVs), showcasing bold and distinct designs that set them apart from the competition.
Volvo is introducing the EX30, a compact and affordably priced model, with starting prices under $35,000. Despite its compact size, Volvo anticipates significant demand for its electric vehicle.
Ford is poised to confront a fresh wave of competition as Tesla’s Cybertruck hits the market, while General Motors’ all-electric versions of the Silverado and GMC Sierra are set to debut next year. As a response to waning demand and a need to revamp their product lineup, Ford has shifted its focus towards hybrid vehicles, emulating the success of market leader Toyota.
As the automotive industry accelerates towards an all-electric future, will Ford’s reluctance to pivot its investment strategy leave it lagging behind competitors that have already surged ahead?
