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Ford to shift one-third of internal combustion engine investments to electric cars

Yesterday, Ford joined the group of automakers recently highlighting their plans for the electric car transition. After confirming the formation of a new internal team, called ‘Team Edison’, to oversee electric car programs, Ford’s new CEO, Jim Hackett, highlighted his investment plan for EVs.

Hackett said during the investor presentation:

“When you’re a long-lived company that has had success over multiple decades the decision to change is not easy – culturally or operationally. Ultimately, though, we must accept the virtues that brought us success over the past century are really no guarantee of future success.”

The most significant change that he announced is an unsurprising accelerated shift to trucks and SUVs while reducing their less profitable passenger car business.

Electric vehicles will mean auto factories can have a final assembly area that is half the size, requires half the capital investment and 30 percent fewer labor hours per car.

As for electric cars, the CEO announced a shift of one-third of the company’s planned investment in internal combustion engines to electric cars.

The CEO said:

“Ford is reducing internal combustion engine capital expenditures by one-third and redeploying that capital into electrification – on top of the previously announced $4.5 billion investment.”

The company didn’t elaborate on the expected result from the new investment in EVs but Reuters got a prescient quote from Ford’s president of global operations, Joe Hinrichs:

Electric vehicles will mean auto factories can have a final assembly area that is half the size, requires half the capital investment and 30 percent fewer labor hours per car.

Electrek’s Take

As we previously reported, some industry analysts suggested that the appointment of Hackett could facilitate an accelerated shift to electric vehicles for the automaker and one even said that Ford could go ‘all-in’ on all-electric vehicles under new leadership.

Ford is definitely not “all-in”. In truth, the automaker’s didn’t even update its planned rollout of electric vehicles.

Instead, in a summary of the investor event, Ford simply reiterated its previously announced plans to bring a series of new electric car for the Chinese market, where it is required to sell EVs due to their ZEV mandate, and their plan for “13 new electric vehicles in the next five years”, which are mostly hybrids so far except for an all-electric CUV with 300 miles of range planned for 2020.

That’s disappointing.

The new thing is Ford’s shift of one-third of their internal combustion engine investments to electric cars, which should accelerate their rollout. But that means that they are still somewhat heavily investing in gas-powered cars, especially since they are doubling down on trucks and SUVs.

If they want to dominate the truck market, they should pioneer electric trucks – beyond their previously announced hybrid F150 (just hybrid not even with a plug).

In Europe, the company has been building all-electric delivery trucks. They should build on that experience and introduce more electric powertrains to their consumer truck lineup.

What do you think? Let us know in the comment section below.

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