Ford expects 40 percent of its global sales to be battery electric vehicles by 2030 as it adds billions to what it's spending to develop them.
The automaker said in a presentation for investors last week that it will add about $8 billion to its EV development spending from this year to 2025.That brings the total spend to nearly $30 billion as Ford begins to develop and build batteries in a joint venture with SK Innovation of South Korea.
Under former CEO Jim Hackett, Ford was criticized by analysts for moving too slowly on its turnaround and future vehicle plans. But those plans have accelerated under CEO Jim Farley, who took in October.
"Today is show, not tell time, for the Ford team," Farley said at the start of the presentation.
Ford announced two new electric vehicle platforms for pickup trucks, commercial vehicles and sport utility vehicles such as the Ford Explorer. It also said smaller vehicles in Europe would be built on underpinnings from Ford's partner Volkswagen. But company executives wouldn't say when the new electric vehicles will go on sale.
Much of the 40 percent target of electric-vehicle sales will come from Europe. There the company has pledged to convert its entire passenger vehicle lineup to electric power by 2030.
The global auto industry and government policymakers are trying to pivot away from internal combustion to battery power to curb climate change. Some European countries, as well as the US state of California, plan to phase out petroleum-powered vehicles. Meanwhile, US President Joe Biden is promising to spend billions on building charging stations as well as offering tax credits and rebates to get people to switch.
Ford rival General Motors says it hopes to stop selling combustion vehicles by 2035.
In addition, shareholders at Exxon Mobil voted last week to replace at least two of the company's 12 board members with directors who are seen as better suited to fight climate change.
Farley said Ford's financial performance hasn't been acceptable in recent years. But it has accelerated its turnaround plan and made progress in the past few quarters. The company is now generating cash flow so it can grow the scale of its electric and commercial vehicle businesses, he said. Ford predicted it would post an 8 percent pretax profit margin in 2023.
The company also announced it would create a separate business called Ford Pro. It will focus on commercial and government fleet buyers. It expects the business to generate $45 billion in annual revenue by 2025, up from $27 billion in 2019.
Ford expects to have about 1 million vehicles capable of getting over-the-internet software updates by the end of this year. It says it will have more vehicles with that capability than Tesla by July 2022. This opens up the chance of added revenue through driver-assist technology and digital subscription services, a market thought to be worth $20 billion by 2030, Ford said.
In the United States, Ford's largest market, electric vehicles only made 1.2 percent of Ford's sales in April. Ford currently offers only one all-electric vehicle, the Mustang Mach-E SUV. But by spring it will have an all-electric F-150 pickup and a battery powered Transit commercial van on the roads. The company said 70,000 customers have put down $100 deposits to reserve an electric F-150 in the week since it was unveiled. Ford's F-Series pickup is the top-selling vehicle in the US.
Ford said it plans a new rear-drive and all-wheel-drive electric vehicle architecture to serve a new generation of high-sales vehicles. They include an electric Ford Explorer SUV and other large SUVs with two and three rows of seats.
The company also plans additional cargo vans and pickup trucks from the new architecture. It expects one-third of pickup truck sales to be fully electric by 2030, said Hau Thai-Tang, the company's product development chief.
Chief Operating Officer Lisa Drake said that by making electric versions of its top-selling brands－the Mustang, F-150 and Transit van－Ford can bring bulk purchasing power to EVs that smaller startups cannot.
She said 70 percent of Mustang Mach-E electric SUV buyers came from owning other auto brands, proving that EVs will help Ford increase its sales.
Ford, she said, expects to reduce battery costs from the current $140 per kilowatt-hour to under $100 by 2025, and $80 by the end of this decade.
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