Ford: Electric vehicles to be 40% of global sales by 2030

DETROIT — Ford expects 40% of its global sales to be battery-electric vehicles by 2030 as it adds billions to what it’s spending to develop them. In a presentation for investors Wednesday, the automaker said it will add about $8 billion to its EV development spending from this year to 2025. That brings the total spend to nearly $20 billion as Ford develops and builds batteries in a joint venture with SK Innovation of South Korea. Under former CEO Jim Hackett, analysts criticized Ford for moving too slowly on its turnaround and future vehicle plans. But those plans have accelerated under CEO Jim Farley, who took over last August.

“Today shows, not tell time, for the Ford team,” Farley said at the presentation’s start. Wall Street liked what it heard, and shares surged 8.5% to $13.90 in afternoon trading, a level not seen in about five years. Ford announced two new electric vehicle platforms for pickup trucks, commercial vehicles, and SUVs, such as the Ford Explorer. It also said smaller European cars would be built on underpinnings from Ford partner Volkswagen. But company executives wouldn’t explain when the new electric vehicles will go on sale. Much of the 40% electric vehicle sales target will come from Europe, where the company has pledged to convert its entire passenger vehicle lineup to electric power by 2030.

Electric vehicles

The global auto industry and government policymakers are trying to pivot away from internal combustion to battery power to curb climate change. Some European countries and California plan to phase out petroleum-powered vehicles, while President Joe Biden promises to spend billions on charging stations and tax credits and rebates to get people to switch. Ford’s crosstown rival, General Motors, hopes to stop selling combustion vehicles by 2035. In addition, shareholders at Exxon Mobil voted Wednesday to replace at least two of the company’s 12 board members with directors better suited to fight climate change.

Farley said Ford’s financial performance hasn’t been acceptable in recent years, but it has accelerated its turnaround plan and made progress in the past few quarters. He said the company is now generating cash flow to grow the scale of its electric and commercial vehicle businesses. Ford predicted it would post an 8% pretax profit margin in 2023. The company also announced it would create a separate Ford Pro business, focusing on commercial and government fleet buyers. It expects the business to generate $45 billion in annual revenue by 2025, up from $27 billion in 2019.

It also expects to have about 1 million vehicles capable of getting over-the-internet software updates by the end of this year. Ford says it will have more cars with that capability than Tesla by July 2022. Ford said this opens up the chance to add revenue through driver assist technology and digital subscription services, a $20 billion market by 2030.

In the U.S., Ford’s largest market, electric vehicles, are only 1.2% of Ford’s sales through April. Ford currently offers only one all-electric car, the Mustang Mach-E SUV, but it will have an all-electric F-150 pickup and a battery-powered Transit big commercial van on the roads by next spring. The company said 70,000 customers have put down $100 deposits to reserve an electric F-150 in the week since it was unveiled. Ford’s F-Series pickup is the top-selling vehicle in the U.S.

Ford said it plans a new rear-drive, all-wheel-drive electric vehicle architecture to bring a new generation of high-sales vehicles, including an electric Ford Explorer SUV and other larger SUVs with two and three rows of seats. The company also plans additional cargo vans and pickup trucks from the new architecture. Hau Thai-Tang, the company’s product development chief, expects one-third of pickup truck sales to be fully electric by 2030. Chief Operating Officer Lisa Drake noted that by making electric versions of its top-selling brands, the Mustang, F-150, and Transit van, Ford could bring bulk purchasing power to EVs that smaller startups can’t.

She said 70% of Mustang Mach-E electric SUV sales came from other auto brands, proving that EVs will help Ford increase its sales. Ford, she said, expects to reduce battery costs from the current $140 per kilowatt hour to under $100 by 202 and $80 by the end of this decade. As an example of its turnaround plan taking hold, Chief Financial Officer John Lawler said international businesses, including Europe, China, and South America, lost over $2 billion per year for the past two years but, in the first quarter, generated a $500 million profit.

Lawler wouldn’t commit to when Ford would restore its dividend, suspended at the coronavirus pandemic’s start. He said the company is focused on investing in growth areas and will return the prize “as soon as practicable.” The $8 billion in additional electric vehicle spending would go toward the joint venture with SK Innovation to develop and manufacture batteries announced last week. By the middle of this decade, the experience will build two North American factories to make batteries for roughly 600,000 electric vehicles annually. The companies say they have signed a memorandum of understanding, but details on the ownership structure and factory locations have yet to be worked out.

Tyson Houlding
I’m a lifestyle blogger with a passion for writing, photography, and exploring new places. I started this blog when I was 18 years old to share what I was learning about the world with family and friends. I’ve since grown into a freelance writer, blogger, and photographer with a growing audience. I hope you find inspiration and motivation while reading through my work!