Ford to launch sixteen EVs by 2022; add partnerships for mobility and autonomous vehicles
Dropping all but two car models from its North American lineup
Ford CEO Jim Hackett, who assumed the post in May 2017, has been working hard to redesign company operations. Ford is suffering from stagnating share prices due to low profitability and a delay in launching initiatives for emerging areas including electrification and autonomous vehicles. Hackett revealed a new five-year business plan to reallocate capital from unprofitable regions and products to high-margin segments, as well as electrification, autonomous driving technology, and mobility businesses. The plan is targeted at increasing the automotive operating margin from 6.1% to 8% through cost reductions of USD 25.5 billion and a saving of USD 5 billion in capital spending by 2022.
In North America, along with the demand shift from cars to SUVs, Ford decided to stop producing next generation versions of its entire passenger car lineup, excluding the Mustang and the Focus Active that will be launched in 2019. The company intends to ramp up sales of high-margin pickup trucks and SUVs with a goal for them to constitute 86% of its total sales in the region.
Ford plans to invest USD 11 billion in electrification by 2022 to introduce forty new electrified vehicles globally, including sixteen all-electric vehicles. Among them, a plug-in hybrid version of the Transit Custom commercial van will be released in 2019; an all-electric performance SUV is slated to roll out in 2020; and hybrid versions will be added to high-volume vehicles such as the F-150, Mustang, and Explorer from 2020 to 2022. In addition, Ford plans to produce affordable compact all-electric vehicles through its joint venture with China’s Zotye Auto.
For mobility businesses, Ford formed a partnership with Lyft, an on-demand transportation company, to conduct research on introducing autonomous vehicles into the market. The company also enhanced its technology through acquisition of new start-ups, including Autonomic and TransLoc. As for an autonomous vehicle business, Ford is collaborating with Argo AI, an artificial intelligence company, to develop autonomous driving software. The automaker is also working with Domino’s Pizza and Postmates to conduct trials of goods delivery services using autonomous vehicles.
Ford’s revenue in 2017 increased by 3.3% year-over-year (y/y) to USD 156.8 billion while its adjusted pre-tax profit decreased by 18.7% y/y to USD 8,437 million due to higher commodity costs and unfavorable exchange rates. Its net income increased to USD 7,602 million, up by 65.4% y/y, owing to revision of pension costs and medical benefits for retirees and tax planning. Ford’s 2018 guideline predicts that revenue will be modestly higher than 2017; its adjusted EPS is projected to be USD 1.45-1.70, down from USD 1.78 in the previous year.
|Focus Active to be launched in North America in 2019 (Photo: Ford)|
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