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Ford switches focus to trucks and EVs

Ford Focus Electric

Ford is refocusing itself away from passenger cars and towards EVs and trucks

US automotive giant Ford has announced a new strategy, with plans to phase out production and sales of passenger cars in North America, in favour of trucks, SUVs and EVs.

Ford has been lagging behind in the EV race, with only the Focus Electric being the only all-electric vehicle on its roster. Even then, the model was made as a compliance car, in order to access California’s car market with an obligatory zero-emission model.

Ford has instead been focusing much of its efforts on hybrids.

Ford president and CEO Jim Hackett in Ford’s first quarter profit release said: “Where we can raise the returns of underperforming parts of our business by making them more fit, we will. If appropriate returns are not on the horizon, we will shift that capital to where we can play and win.”

“Given declining consumer demand and product profitability, the company will not invest in next generations of traditional Ford sedans for North America. Over the next few years, the Ford car portfolio in North America will transition to two vehicles – the best-selling Mustang and the all-new Focus Active crossover coming out next year,” he continued.

Ford aims to phase out almost all of its Sedans in North America. Hackett added: “For example, by 2020, almost 90% of the Ford portfolio in North America will be trucks, utilities and commercial vehicles.” As a result, it is saying goodbye to models like the Taurus and Fusion.

In its Q1 results announcement, Ford also said that it would add hybrid-electric powertrains to high-volume, profitable vehicles like the F-150, Mustang, Explorer, Escape and Bronco.

“The company is also exploring new “white space” vehicle silhouettes that combine the best attributes of cars and utilities, such as higher ride height, space and versatility,” the company stated.

Although it marks a retreat, Ford has been decisive in abandoning underperforming areas in the past, leaving behind the Japanese and Indonesian markets just a few years ago.

It also should bode well for its electric efforts. Ford previously announced that it would increase its 2015 EV budget of US$4.5 billion up to US$11 billion, and intends to have 40 EVs by 2022, including 13 electric and hybrid models.

In the meantime, the company’s first-quarter 2018 results have been positive, with income rising year on year, although company EBIT was down on 2017.

The statement reiterated the company’s planned rollout of battery EVs in 2020 with a “performance utility,” but also appeared to revise upwards its targets, now promising 16 battery-electric vehicles by 2022.

Hackett was the driving force between the creation of Ford’s “Team Edison,” a unit dedicated to developing EV partnerships with other companies. While Ford’s new EV focus will be a boon to Team Edison, it remains to be seen how much of this budget will go to Ford’s own projects and how much will be with outside partners.

 

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