American legacy automaker Ford has long been striving to beat industry leader Tesla. It has never yet succeeded in snatching the top spot from the Musk-led automaker and even failed to defend its top second position against General Motors in Q1 2023.
Ford’s electrification strategy seems to be failing to aid the company in competing in the EV industry, considering another target pushback.
Ford delays 600k/year annual production rate target to 2024
Ford initially announced plans that it would hit an annual production target of 600,000 electric vehicles per year by the end of this year.
However, on Thursday, it adjusted the timeline of achieving the initial target to sometime in 2024. Ford says the move is due to the slower-than-expected adoption of electric vehicle technology.
Apart from that, the automaker also previously disclosed a target of producing over 2 million EVs annually by the end of 2026. However, it also withdrew that goal, saying that the company is now uncertain about the time it will reach that capacity.
“The transition to EVs is happening, it just may take a little longer. It will be a little slower than the industry expected.”
CFO John Lawler
Nonetheless, CFO Lawler noted that Ford’s electrification strategy, including its spending plan and profitability target, remains unchanged. Therefore, the automaker still aims for an 8% operating margin for its EV unit. It is also looking to cut its capital expenditures on the vehicles.
“We’re going to find a way to get to that 8%.”
CFO John Lawler
Ford CEO Jim Farley also claimed that slow EV adoption could potentially benefit the company.
“The near-term pace of EV adoption will be a little slower than expected, which is going to benefit early movers like Ford. While others are trying to catch up, we have clean-sheet, next-generation products in advanced development that will blow people away.”
Ford CEO Jim Farley said, citing the first-gen F-150 Lightning and Mustang Mach-E’s success
See Also:
- Ford’s EV sales declined 2.8% in Q2, despite F-150 Lightning’s strong performance
- Ford steps up EV efforts with plans to electrify the Fiesta Model and modifies Mustang Mach-E
- Ford and GM to surpass Tesla in the EV market share by 2026
- Ford halts iconic Fiesta model production to pave the way for the upcoming electric Explorer SUV
- Ford plans layoffs as electric vehicle transition pressures mount
Ford’s Model e unit reported $1.8 billion in operating loss in the second quarter of this year. Hopefully, the company will be able to see even a slight improvement in its EV business unit this new quarter.
