Electricity Competition: Ford Curbs Losses with Internal Combustion Engine Success
In a world of contrasting colors, the sun’s rays meet the remnants of smoke that rose from Ford’s classic engines, which the company has been manufacturing for decades.
Ford faces a greater ambition, embarking on a new journey in the electric car world, the sky of challenges is dark, and the rain alternates between joy and sorrow.
Ford is planning to enter a bright new world of electric cars, but the cost of transitioning to this world has been higher than they expected. Ford is on track to lose billions of dollars in its electric car business this year.
But what gives them hope and financial flexibility is the sweeping success of internal combustion engines, which still dominate the sales market.
Ford aspires to enter the world of electric cars
Ford’s electric vehicle division recorded a loss of an estimated $1.1 billion (€1 billion) from total revenue of $1.8 billion.
The company now expects a significant loss in this sector for the full year, with a projected commercial loss of $4.5 billion. This is higher than analyst expectations, which were for a loss of $3 billion.
Ford aims to reach an annual production capacity of 600,000 electric vehicles in 2024, instead of its previous plans to achieve that in the current year. The company plans to finance this transition by selling internal combustion engine cars, which generate a lot of money for the company’s coffers.
The core automotive division showed a strong performance, generating an operating profit of $2.3 billion on total revenue of $25 billion.
It even makes more profit than its commercial vehicles division, with commercial profits of $2.4 billion from total revenue of $15.6 billion.
In this heated battle between automakers, Ford, like others, is seeking to establish a stronger foothold in the electric car market, which is currently dominated by Tesla.
The United States is now seeing strong competition in the large pickup truck segment, which is still a popular but largely untapped market.
While Tesla is working to increase production of its Cybertruck electric pickup truck, Ford has sold a limited number of electric models of its most popular vehicle, the F-150.
Ford faces some obstacles on its path to an electric future, as production of its electric F-150 Lightning was halted due to a battery fire. The company has decided to investigate the matter thoroughly and suspend production for a temporary period.
The team is now working to increase production capacity to 150,000 vehicles per year, in the hope of improving performance and achieving success. In this context, the company’s CEO reduced the price of the F-150 Lightning by around $10,000 in mid-July, citing cost-cutting and efficiency gains.
The manager assured that he would not lose sight of the rationale behind the pricing policy in order to gain market share.
The Ford CEO strongly believes that software will be the area where brands will differentiate themselves, as design, performance, and build quality are considered basic preferences in the electric car market.
The real success, however, lies in the speed with which the data collected from the car is used to improve the software to suit the needs of customers. In this way, software will be the key to success in the electric vehicle market.
Through research and studies, Ford discovered that customers who buy its electric cars are not strongly attached to its brand in their first experience with electric cars.
However, when they are ready to buy their second electric car, they are more likely to stick with the brand they have relied on before.
It is interesting to note that electric cars are starting to change the concept of target groups. When the F-150 Lightning was released, it was the first Ford and first pickup truck for the majority of buyers.
The figures show the company’s sales in the second quarter of this year grew by 12% compared to the previous year, with profits jumping from $667 million to nearly $1.92 billion.
The company now expects business results to be between $11 billion and $12 billion this year after removing some costs, up from a previous range of $9 billion to $11 billion.
This is the story of Ford, its challenges and ambitions in the electric market. Ford is preparing to launch into a future of renewal, challenges, and opportunities. The world of electric vehicles is a field that calls for continuous development and sustainable creativity.
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