Dearborn: As per reports, Ford Motor Company, historically known for its dominance in the large truck and SUV market in the U.S., is shifting gears with a new strategy that might surprise some investors. The automaker now plans to focus on smaller, more affordable electric vehicles (EVs) as a key driver of profitability in its EV sector.
Reportedly, Marin Gjaja, Chief Operating Officer for Ford’s Model e EV unit, described the strategy as an “insurance policy” that will allow the company to expand its successful hybrid models and create more budget-friendly EVs. This approach aims to build a more capital-efficient and profitable EV business for both the company and its investors.
“We are convinced that the highest adoption rates for electric vehicles will be within the affordable segment, especially at the smaller end of the size spectrum,” Gjaja said in an interview with CNBC on Thursday. “We must compete in this space to face the emerging challengers.”
The anticipated competition includes several Chinese automakers, notably Warren Buffett-backed BYD, which have been rapidly expanding from their home market into Europe and other regions.
Gjaja's remarks came shortly after Ford announced updates to its EV strategy, which will involve up to 1.9 billion dollars in costs. This includes approximately 400 millions dollar allocated for the write-down of manufacturing assets and additional expenses and cash outlays amounting to 1.5 billion dollars.
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