Ford doubles electric car investment
At a Detroit auto show Bill Ford, chairman of the vehicle manufacturing giants Ford Motor Co. pledged to increase their investments in electric car to US$11 billion and have 40 hybrid and fully electric vehicles in its model lineup. This figure is significantly higher than the previous target of US$4.5 billion by the year 2020.
"We're all in on this and we're taking our mainstream vehicles, our most iconic vehicles, and we're electrifying them," Ford told reporters.
Jim Hackett, Ford’s Chief Executive, indicted that the company would cut US$14 billion in costs over the duration of the upcoming fiver year, shifting the capital investment away from conventional sedans and internal combustion engines, towards developing more trucks and electric and hybrid cars. Of the 40 electric vehicles Ford intends to introduce by 2022, 16 will be fully electric and the remaining 24 will be plug-in hybrids.
The vehicle manufacturing industry has opted to take the route of transitioning to hybrid and electric vehicles due to a number of reasons. One factor which played an important role in Ford’s decision was the increasing competitiveness in the vehicle manufacturing industry for cleaner, more efficient modes of transportation.
Companies such as General Motors Co., Toyota and Volkswagen have also highlighted how they intend to expand their electric vehicle lineups by not only offering electric vehicles, but luxury and performance in the form of an SUV style.
GM indicated in 2017 that it would add 20 new battery electric and fuel cell vehicles to its products being offered by 2023.
Volkswagen announced in November 2017 that they will commit to spending $40 billion on electronic cars, autonomous driving and new mobility services by the end of the year 2022.
Toyota on the other hand, is in a rush to commercialise a groundbreaking battery technology during the first half of the 2020s, which if done right, can cut the cost of making electric cars.
Tesla also plays a big role in the pressure being exerted on the other motor vehicle companies due to their success in the electric and hybrid vehicle arena.
Tesla surpassed Ford in market value in 2017. This encouraged the company to cut costs and remove some models from their lineup, with the intent to refocus the company’s future on SUVs, trucks and electrification.
Another major factor which is fueling this transition is countries such as China, India, France and the UK, announcing that they intend to phase out vehicles powered by combustion engines and fossil fuels between 2030 and 2050. These countries have made that commitment in order to decrease their carbon emissions from fossil fuels.
The head of Ford’s North American operations, Raj Nair, stated that “We believe man-made CO2 is contributing to climate change and we’ve got our part to play.”