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Summary
- Ford draws up battle plan for the EV market with a range of auto innovations.
- Teams up with Google to boost tech capabilities for a hands-free, connected driving experience.
- It will look to leverage existing markets to push sales and reinforce the franchisee business.
Ford Motor is not ready yet to cede any ground to its competitors in the electric vehicle (EV) market. This has been made amply clear when the company CEO Jim Farley spoke highly of the all-new electric Ford Mach-E, which he described as a significant competitor, during the announcement of the company’s fourth-quarter earnings report in January.
At the same conference, he also said that the company would increase its investments in its EV projects to US$22 billion and another US$7 billion for the AV segment over the next five years, almost double the amount that was originally planned. As he pointed out, the Mach-E has all the wherewithal to compete against Tesla’s Y model.
Weighs EV Battle Plan
So, the battle lines have been drawn for the lucrative EV market, where other global automakers have also expressed interest. Ford’s strategy, as Foley says, would be to focus on markets where it already has a significant presence so it can leverage itself further. Ford announced in January that it will start manufacturing the Mach-E at its Changan plant in China, the largest EV market currently.
Ford already has a significant market cap, around US$45 billion, but what’s encouraging is that it has been able to push sales despite a slowdown. In its fourth quarter ended December 31, 2020, Ford reported an adjusted EBITA of US $1.7 billion, which was up from US $485 million in the corresponding period. Although there have been losses, as with others in the auto industry, it has been able to implement some innovative ideas which can give good returns to offset the shortfall.
Speeds Up Auto Innovation
Ford has tied up with Google to accelerate its auto innovation to provide its customers a handsfree experience for simple tasks like listening to music, finding a location on a map, or even changing a channel on the multimedia console with the help of AI, machine learning, and data mining. Drivers can simply sound out what they want to do, and technology would do the rest for them by itself.
The company plans to introduce these new features in its new line of Ford and Lincoln vehicles. As part of this new six-year partnership, they would set up a joint team called Team Upshift to drive the innovation projects, starting in 2023. They would explore Android and Google Cloud-based built-in capabilities to propel the new driving experience of Ford cars.
But irrespective of these new initiatives, customers continue to repose their faith in Ford cars. In its December quarter, amid the pandemic, Ford sold a total of 542,749 vehicles, of which, 288,698 were trucks, 216,732 SUVs, and 37,319 cars. It goes on to show, the company’s in-built strengths which it can leverage even at a time of crisis. When most companies were struggling to sell consumer essentials, Ford has shown it can sell expensive diesel guzzlers from its global stables.
Ford has also unveiled plans for South America where it will launch the all-new Ford Ranger pick-up trucks and a range of EVs from its facility in Brazil in 2021. Because of COVID, it will, however, cease production in the country where it has plants in Camaçari, Taubaté, and Troller.
