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Ford cuts battery orders to relieve pressure

2024-05-27 Update From: AutoBeta NAV: AutoBeta > News >

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AutoBeta(AutoBeta.net)05/14 Report--

According to foreign media reports, Ford has begun to weaken orders from battery suppliers in order to reduce the growing losses in the electric vehicle business, while planning to reduce spending by $12 billion on battery electric models, delay the release of new electric vehicles, cut the price of vehicles such as the FMI 150 Lightning, and postpone and shrink the planned battery plant. It is worth mentioning that although Ford has reduced its battery orders, it continues to maintain partnerships with suppliers, including SKOn, a battery manufacturer of South Korea's SK Group, and LG Energy Solutions.

Meanwhile, Ford said it was reconsidering plans to "stop selling fuel vehicles in Europe by 2030". 'Because of the slowdown in the popularity of electric vehicles in Europe, we think we still need to provide customers with options for internal combustion engines and hybrid vehicles beyond 2030, 'Ford said in a statement. The company is closely monitoring the situation and will make adjustments as needed. "

On April 24th, Ford announced its first-quarter 2024 results. Ford's revenue in the first quarter of 2024 was $42.8 billion, up 3 per cent from a year earlier, according to the results. Net profit was $1.3 billion, down 22% from a year earlier. Of this total, Model e, Ford's electric vehicle division, lost $1.3 billion on revenue of just $100m this quarter, equivalent to a loss of $132000 for each vehicle sold, dragging down the company's overall profit. Ford expects its electric vehicle business to lose as much as $5.5 billion in 2024, close to the total profit of Ford Blue, the diesel locomotive division.

Jim Farley, Ford's chief executive, said Model e, Ford's electric vehicle division, was the main drag on the company's overall earnings. Ford has been developing low-cost electric vehicle platforms internally for the past two years and plans to launch more electric vehicles at reasonable prices in the future. It is understood that Ford is developing a small electric car, which starts at $25000 (about 180000 yuan) and will make its debut at the end of 2026.

John Lawler, Ford's chief financial officer, said the company is committed to reducing the cost of electric vehicles and making the electric vehicle business profitable. While cutting costs, Ford has to cut prices to remain competitive in the face of tremendous pricing pressure from competitors in the industry. The "price war" makes profitability a great challenge.

Ford, which has an important goal of profitability in the electric vehicle business, has also begun to actively adjust its management. A few days ago, Ford announced personnel changes, chief financial officer John Lawler (John Lawler) will also serve as Ford vice chairman, focusing on Ford's strategic and partnership responsibilities. Sherry House, former chief financial officer of electric carmaker Lucid Motors, will become Ford's vice president of finance next month and will succeed John John Lawler as chief financial officer in early 2025.

In response, Ford said: "House adds important leadership to Ford at a time when Ford urgently needs to build a profitable electric car business, create new sources of recurring revenue and build a more dynamic and resilient business. She can combine deep roots and enthusiasm in the automotive industry with practical experience in investment banking, travel and technology, including electric vehicles and self-driving."

In 2019, Tesla detonated the upsurge of new energy vehicles, and new energy vehicles quickly became a new tuyere for global cars, which benefited enterprises in the new energy industry chain. Under this stimulus, almost all the car companies in the world have begun to speed up the pace of car electrification, including Mercedes-Benz, BMW, Audi, Volkswagen, Ford, General Motors, Toyota and so on. At the same time, a large number of new car-building forces have been born, including Lucid, Rivian, Faraday Future, etc., but with the market calm, Chinese car companies have a certain dominance in the new energy vehicle market. The development of global auto giants in the electric vehicle market is not smooth. In other words, while most car companies are embracing new energy and putting forward plans to stop selling fuel cars, most are losing money. At present, among the global car companies, only Tesla, BYD and ideal Automobile are known to be profitable.

Now, as the price war for new energy vehicles continues to intensify, competition becomes fiercer, and consumers in Europe and the United States are less enthusiastic about embracing electric vehicles, the losses in the electric vehicle business of traditional multinational car companies continue to increase. Under the heavy burden, automobile multinational giants such as Ford, Mercedes-Benz and Audi have slowed down the pace of transformation, readjusted product planning and marketing strategies, and "turned around" hoping to maintain their leading position in the fuel vehicle market so as to make huge profits. Of course, the transformation of electrification will not be reversed, but different car companies have different attitudes towards the transformation of electrification. Everything is a game between share and profit, and it is also the test of the strategic determination and rhythm of each car company in the wave of electrification.

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