Year 2017, Ford announces that it will invest 4.5 billion dollars to completely transform the brand. The year and Mark Fields have just begun, then CEO of the company, confirmed that they would invest in electric cars and completely autonomous driving. In five years would launch 13 more or less electrified models And in 2021 they would have a completely autonomous car in the market.
Just a few months later, Tesla’s price (then raising the launch of Tesla Model 3) surpassed Ford. Undoubtedly, the strength of Elon Musk’s had pressed a company with more than a hundred years behind him and responsible for launching the First big mass car in their country to invest strongly in a completely foreign technology for them.
We are in 2025, Ford has launched the market Ford Mustang Mach-Ehe Ford F-150 Lightning (an electric pick-up) in the United States and, recently, the Ford Explorer and the Ford Capricars that are actually different bodies of the same vehicle. With fewer spotlights, the Electric Ford Puma.
In addition, they have decided leave the company in two in what they have called Ford Model E (electric and software) and Ford Blue (combustion). The idea is to function as a rocker and that the weight that now falls to Ford Blue is balanced until falling on the side of Model E in a transfer of powers of combustion to the electric.
All that strategy, however, does not go through a good time. Jim Farley is now the Ford CEO and has strong opinions about the moment the company is living.
Burning 2,000 million dollars
It is the cost to be paid for a strategy that is not working. In the last presentation of results, Farley has confirmed that the company provides a decrease in the expected benefits of 2,000 million dollars.
Collect in Bloomberg that in 2025 do not expect benefits (before tax) above 8,500 million dollars and that could be below 8,000 million dollars, far from the 10.200 million dollars collected in this item in 2024. Since last summer , the company’s actions have suffered a hard adjustment, losing its value more than 35%, as a consequence of the bad expectations collected with each new report.
Ford has to face a market, that of the electric car, where the margins of benefits are scarce or have vanished given the sales volumes with which these companies work. But, in addition, its CEO ensures that the cars they like in the United States are the opposite of what an electric car should be.
They are clients who “have very demanding cases for an electric vehicle. They tow, drive out of the road, make long road trips. These vehicles have worse aerodynamics and are very heavy, which means Very large and expensive batteries“, Farley says that It is not the first time which points to large vehicles are a problem for electrical technology.
In fact, this approach is those that have cost 1.9 billion euros to the company. In full fever from the gigantic electric car, Ford launched a seven -seater electric explorer. The car should fight with the great American SUVs from electrical technology. Last summer of 2024, Ford confirmed that he canceled that development and that he would not launch the car to the market because there was no demand.
Since then, the company’s CEO ensures that this type of cars need gigantic batteries, very expensive to produce and more complicated to make profitable. That is why the intention is to sell the smallest possible electric cars. The problem is that the company itself has decided to start the house for cars such as the Ford Mustang Mach-E or the Ford F-150 Lightning. Rest in peace the Ford Electric Explorer of seven seats.
The other alternative is directly Learn from China. The Asian country has managed to position itself as the most leading country in this technology and, in fact, Farley himself has been the first to praise his way of working and in Confirm that Ford is shining His cars to understand how they got their competitive advantage.
In words a The New York TimesFarley said that China is 10 years ahead in the manufacture of batteries which gives them a strategically more advanced position and, therefore, do not have to face the enormous economic difficulties facing companies such as yours.
To this Chinese competition, American car manufacturers have now to face a possible commercial war that could seriously increase their products. The Ford Mustang Mach-E, for example, is also manufactured in Mexico and must be taken into account that Steel and aluminum tariffs They will also end up uploading the final price of the product. Regulatory changes that have not been contemplated in the last presentation of results.
Ford’s hopes are put in BlueOval Citya huge factory that has cost 5,600 Millions of dollarsdesigned in 2021 and subsequently projected under the umbrella of the Inflation reduction law by Joe Biden. A program that, now, is in the air with the arrival of Donald Trump to power. With that program they hope to produce batteries at lower cost in the coming years.
However, Farley is clear: in China they have been in China to the United States and, at the moment, there is no American company that can match in benefits and load time the batteries of Catl.
Photo | Ford