Ford announces strategy shift in electric vehicles: Smaller is suddenly finer

The US auto giant Ford plans to invest more money in the development of smaller electric cars instead of large vehicles in the future. He expects this to also become an industry-wide trend, said Ford CEO Jim Farley on Tuesday. It has become clear that while customers are interested in electric vehicles, many do not want to pay a high premium for them. At the same time, the Ford CEO reiterated that the transition to electric cars is inevitable from the company's perspective.

During the coronavirus pandemic, the rapidly increasing sales of electric cars at the time fueled exaggerated expectations of future demand, Farley said. Investments should now be more closely aligned with actual interest. The cheaper Tesla model and vehicles from Chinese manufacturers would be “the ultimate competition” in the future. Tesla plans to start production of its new vehicle at the end of 2025.

Ford also wants to save money by omitting features that customers show little interest in. As an example, Ford manager Kumar Galhotra mentioned the parking automation, which “very, very few people use.” Thus, Ford could remove the function – and save 60 dollars per vehicle, which would amount to about ten million dollars a year. The operating loss in the electric car division rose to 1.57 billion dollars in the past quarter. In contrast, the commercial vehicle business generated an operating profit of 1.8 billion dollars. Beyond that, Ford earned 813 million dollars with combustion engines and hybrid vehicles.