Ford increases investments in hybrid and electric vehicles by $11bn
Ford will invest $11bn to have 40 hybrid and fully electric vehicles by 2022, more than doubling its originally planned investment of $4.5bn.
Ford Motor Co.
$12.06
10:59 18/04/24
Speaking at the Detroit auto show on Sunday, company chairman Bill Ford also said that the investment would cover the costs of developing dedicated electric vehicle architectures.
President of Global Markets and Ford vice president, Jim Farley said that this electrification plan meant making "intelligent vehicles for an intelligent world" and that "people want high quality electric vehicles".
Ford said that the plan was to make conventional vehicles electric because "if we want to be successful with electrification we need to do it with cars that are already popular."
One of those, a hybrid version of the F-150 pick-up, was expected to roll-off assembly lines by 2020.
Ford CEO, Jim Hackett told Bloomberg TV that the new capital outlays were part of a "fitness" program for the company that would see it transform its business. This shift of strategy started when Hackett replaced former CEO Mark Fields in May.
"The hybrids that Ford can build are on a basis of technology that’s very unique," said Hackett.
Investment would be financed from internal earnings "and still yield shareholders gains on invested capital", he said.
In October of 2017, Hackett had already told investors the company would cut costs by $14bn over the next five years, funnneling the resulting savings towards capital investments and developing hybrid and electric cars.
Of the 40 vehicles being worked on, 16 were to be fully battery-electric while the rest would be plug-in hybrids, executives said.
Some of the electric cars would also be developed in China, the company said, and aimed at that market.
Many countries, including the UK, had already announced plans to phase-out fossil fuel-powered vehicles between 2030 and 2040.
Ford's competitors had also joined the race to develop environmentally-sustainable vehicles, with Volkswagen expected to invest $40bn on electric cars and autonomous driving by 2022 and Toyota in a push to commercialise a breakthrough in battery technology.