Ford CEO Jim Farley recently stated that his company's goal in the electric vehicle market is to outperform rival Tesla Motors. We heard about the techniques they plan to use to attain their objectives the day before yesterday. The first half of this strategy is concerned with investments, while the second is concerned with the reorganization of the company itself.
Formerly, Ford stated that it intended to invest $ 30 billion in electrification by 2026, but the company has since upped that figure to $ 50 billion or perhaps more. A consequent surge in manufacturing will occur, with more than 2 million electric vehicles expected to be produced by 2026, according to estimates. It goes without saying that, in the years following, the production of vehicles with electric motors will increase, while the production and sales of gasoline and diesel will decline. As a result, by 2030, electric motors should be used in half of the vehicles manufactured in Ford's facilities.
In terms of reorganization, Ford will divide the department responsible for electric vehicles from the department responsible for vehicles powered by internal combustion engines, among other things.
While Ford anticipates profitability in its electric vehicle division by the next generation of electric vehicles, which should begin manufacturing in 2025, they do not expect it to be profitable until that time. According to Wells Fargo analyst Colin Langen, the division's split, which will disclose its profits separately, will allow investors to better assess the electric vehicle business and will enable them to keep track of its revenues and losses over the next few years.
It will be difficult to get control of the electric vehicle market. Millions of dollars will be required to supply raw materials and components critical to battery development, and Farley believes that the electric vehicle department should concentrate on innovation while the internal combustion engine department should make a profit, or money that will be reinvested in electrification.
