Ford doubles investment in EVs and autonomous drive
Ford wants to surpass General Motors as the bigger investor in electric cars and autonomous drive. Dearborn’s carmaker has announced that it will invest $22 billion by 2025 on electrifying the vehicle line-up. That’s double the investment compared to the previous one, which was set at $11,5 billion.
Ford’s new CEO, Jim Farley, called it a “more aggressive” plan to position the company at the forefront of future mobility and transportation. The stock market awaited Ford’s reaction since General Motors last year announced that it would increase its spending in the same technology to $27 billion between 2020 and 2025.
Not all of that cash is fresh, though. Ford’s plans include an earlier investment of 7 billion dollars. After the math, General Motors remains the bigger spender. And not of all of the money is spent on battery electric vehicles, but also on hybrids, and plug-in hybrids.
Additional $7 billion
The real catch up, however, is with Tesla. Elon Musk’s company is widely regarded as the sole carmaker doing real business with mass electrification and autonomous drive. No wonder then, that on top of the investment in electrified vehicles, Ford will also cough up an additional amount of $7 billion to develop autonomous driving vehicles during the next ten years.
“We are accelerating all our plans,” Jim Farley said about the transformation. “The company is all in and will not cede ground to anyone in developing and delivering connected electric vehicles.” To enhance their cars’ connectivity, Farley announced a six-year partnership with Google to “make the most of data-driven opportunities”.
Production hit by chip shortage
In the last quarter of last year, Ford posted stronger than expected earnings, beating forecasts by Wall Street. But the pandemic still keeps a firm grip on their factory output. Last Tuesday, the automaker announced it had to cut the production of one of its most profitable models, the F-150 pickup, by two-thirds. The reason is that the supply chain can’t deliver enough semi-conductors.
It’s a global problem. The coronavirus pandemic has boosted teleworking and the pursuit of hobbies, making semi-conductors much more in demand in other industry fields. The rebound in the automotive sector took the chip makers by surprise. The shortage could impact Ford’s profits by $1 billion to 2,5 billion this year.