Ford Focuses On Cutting Electric Car Production Costs And Canceling Three-line Electric SUV

JAKARTA - The high cost of producing electric cars that make selling prices uncompetitive on the market makes the US auto giant Ford announce the delay in developing some of their electric vehicles. One of the major decisions taken was to cancel production of the three-line electric SUV and delay the launch of the latest electric version of their best-selling truck, the F-150.

Launching Reuters, August 22, this decision was taken as a strategic step to focus on reducing the cost of producing electric cars. This delay follows the same trend by other car manufacturers such as General Motors.

"With pressure on prices and profit margins, we have made the decision to adjust our product and technology roadmaps as well as industrial footprint to achieve our positive EBIT (profit before interest and tax) target in the first 12 months of launch for all new models," Ford Chief Financial Officer John Lawler said in a statement. official.

Instead, Ford will focus more on segments that have been their strength, namely pickup trucks and commercial vehicles. This strategy was marked by Ford's decision to produce medium-sized electric pickup trucks and new electric vans. This decision was welcomed by investors with a 1.1 percent increase in Ford shares.

Ford CEO Jim Farley said one of the main solutions to slowing the growth of electric car sales was reducing production costs. This is the main goal for the company's future health, given Ford is expected to lose up to 5.5 billion US dollars on electric vehicles this year alone.

To compete with electric car manufacturers from China and Tesla continuing to press production costs, Farley staked Ford's future in their special team in California which is developing technology for more affordable electric cars. The first vehicle to use this new technology is a medium-sized electric pickup truck scheduled to launch in 2027.

In addition to delaying electric cars, Ford also stated that it will focus more on developing hybrid cars, especially for the SUV segment. This is done to attract consumers who want vehicles with a longer distance but still affordable.

Ford will also relocate some of their battery production to qualify for incentives under the US Inflation Reduction Act (IRA) and further reduce production costs.

"Achieved electric vehicles start with affordable batteries," Farley said in a statement.

The automaker will move part of the battery production they made with South Korean battery partner LG Energy Solution for their Mach-E Mustang from Poland to Holland, Michigan.