Ford aims to secure 8 per cent EV margins
Ford wants to achieve eight per cent margins on its next-generation electric vehicles, set to hit the road by the middle of this decade. However, the automaker expects it will take several years to offset a cost disadvantage of up to 8 billion dollars over competitors.
According to Reuters, Ford CFO John Lawler expects that Ford can save up to 2.5 billion dollars his year alone through better management of production schedules and a drop in commodity prices. Other measures include reducing dealer inventories and relying more on online sales, CEO Jim Farley to the news agency.
Ford has “fixed” the designs of its new electric vehicles and is aiming to reduce battery cell costs to less than 70 dollars per kilowatt-hour by switching to LFP chemistry. To boost the profitability of its second-generation e-vehicles, Ford plans to follow Tesla’s lead and change to large underbody castings.
Other benefits are expected to come from introducing more efficient battery chemistries and reducing battery pack sizes while moving to more aerodynamic vehicle designs. The latter is also a reason for Ford’s entry into Formula 1. Moreover, Ford just confirmed that it is cutting around 3,800 jobs in Europe over the next three years, mainly in product development. The reason: allegedly the transition to purely electric drives and the associated reduced vehicle complexity.
Ford has also sold off a large part of its Rivian shares. The stake now stands at 1.15 per cent. Rivian shares had plummeted since the beginning of last year.