Ford is reorganising its e-mobility approach in China
Ford has adjusted its electric car strategy for the Chinese market. The core of the reorganisation is that the company Ford Electric Mach Technologies (FMeT) for the development of electric vehicles will no longer operate independently in the future.
The subsidiary FMeT was founded in China less than a year ago and was not only responsible for the development of new electric cars, but also for the distribution of the currently only electric model – the Chinese version of the Ford Mustang Mach-E. In the meantime, the independence of Ford Electric Mach Technologies is already history again: As first reported by the portal Yicai Global and later confirmed by Ford FMeT, was integrated into Changan Ford, Ford’s general China joint venture with Changan Automobile, on 1 August 2023.
This means that Changan Ford will take over sales of the Mustang Mach-E electric model with immediate effect, with nearly 300 dealers in 70 Chinese cities. The sales network for the electric car is thus almost tripled. According to insiders, the reason for the change in strategy is the weak sales of the electric car. The sales figures of the Mustang Mach-E in China are so bad that it is difficult for the separate company to accept losses in the long run. An article from China even reported that only 60 units were sold from January to April. Officially, the integration into Changan Ford is due to “Ford’s strategic transformation and business realignment in China”.
As Yicai Global writes, negotiations on the move have been going on for more than a month. The compromise was that some of FMeT’s sales staff would be able to transfer to Changan Ford, while the majority of the employees would be compensated or their contracts would simply expire. Changan Ford had initially refused to take over employees.
Last October and this spring, Ford reduced the prices of the Mustang Mach-E in China in two stages by a total of 68,000 yuan (about 8,700 euros). In the meantime, the E-SUV was available at prices starting at 209,900 yuan, which is equivalent to about 28,600 euros. However, the discount campaign apparently did not boost sales sufficiently. According to Yicai Global, 33 Mustang Mach-Es were sold in China in April (i.e. during the price reduction, which lasted until 30 April). This means that more than half of the modest total sales from January to April can be attributed to the discount campaign.
Together with the realignment, a step that has so far been rather unusual in the car industry was also announced: Changan Ford will replace and upgrade the processor for the digital cockpit free of charge in all Mustang Mach-Es delivered in China so far. Until now, the older Qualcomm Snapdragon 820A chip was installed. This will be replaced with the Snapdragon 8155, which is now standard in many mainstream models in China.
The Mustang Mach-E for China has been built by Changan Ford at its Chongqing plant since October 2021. In China, Ford relies on battery cells from CATL. The Mustang Mach-E for North America and Europe is built in Mexico and uses battery cells from LG Energy Solution’s Wroclaw plant in Poland.
Globally, Ford’s electric vehicle business also continues to post large losses. Therefore, the target of building 600,000 electric cars globally has been pushed back by one year from the end of 2023.