Ford corrects a major problem in electric car sales after realizing the mistake

In a nutshell:

Ford implements key changes in its electrification strategy to boost its international sales:

• Transformation of the dealership network in the U.S. to allow the sale of electric vehicles starting July 1.
• Launches in Europe: electric Ford Explorer and Ford Capri in 2024.
• Layoffs at the Almussafes plant in Spain, affecting 1,600 workers.
• New strategy focused on small and affordable electric vehicles.
• Loss expectations for the Model e division of 5.5 billion dollars in 2024.

In such a competitive industry as the automotive sector, even giants make mistakes and must make drastic decisions to correct their course. This is the case for Ford, which has recently acknowledged errors in its electrification strategy and is implementing significant changes to boost the sales of its electric vehicles in the United States and Europe.

Transformation of the dealership network in the United States

In early 2022, Ford decided to segment its brand in the United States, clearly distinguishing between electric and thermal vehicles. According to this strategy, dealerships wanting to sell electric cars had to meet strict requirements, such as having special facilities, charging points, and specifically trained personnel. However, this elitist segmentation has not yielded the expected results.

Losses in Ford’s Model e division are unsustainable, reaching a projected deficit of 5.5 billion dollars by the end of 2024. In just the first quarter of the year, losses amounted to 1.3 billion dollars. In light of this situation, a drastic measure will be taken: starting July 1, all U.S. dealerships will be able to sell electric vehicles, eliminating previous requirements. The goal is clear: to cover a larger area in the vast American territory and improve the much-needed sales.

Transforming the dealership network will allow Ford to expand its electric presence and potentially regain lost ground. This strategy aims not only to increase sales but also to reduce costs and facilitate the adoption of electric vehicles by the public. The company hopes this decision can reverse the losses and generate a positive impact on the international landscape.

Upcoming launches and adjustments in Europe

In addition to changes in the U.S., Ford is preparing significant launches in its European market. One of the most anticipated is the 100% electric Ford Explorer, which will be marketed shortly in Europe. This model is the first electric SUV born from the collaboration with the Volkswagen Group. Soon, we will also see the launch of the Ford Capri, which is scheduled to be presented on July 10.

However, not all news is good in Europe. The Almussafes plant in Spain, one of the most important for Ford, will lay off 1,600 workers as part of an employment regulation plan agreed with the unions. The Cologne factory in Germany is at risk of facing a similar fate, even though it has just started producing the new Explorer.

These workforce adjustments are part of a broader restructuring that Ford is implementing to become profitable again in Europe. Mass layoffs and restructuring of plants are painful but necessary decisions to ensure the company’s viability in the future.

New strategy for electric vehicles

Jim Farley, CEO of Ford, has acknowledged that profitability for electric vehicles will not be achieved in 2026 as initially planned. With losses of approximately 100,000 dollars for each registered vehicle, Ford needs a new strategy. To this end, the company is prioritizing the development of small and reasonably priced electric vehicles.

In Dearborn, a select group of engineers is working on a specific platform for these new models. Ford has hired experts from companies like Tesla, Lucid, and Rivian to ensure the success of this project. However, results are not expected before 2027 or 2028, when these new electric vehicles will be available in dealerships worldwide.

This commitment to accessible electric vehicles reflects a significant shift in Ford’s strategy. With this, the company hopes not only to improve its market position but also to significantly contribute to emission reductions and promote a more sustainable future.

Key data and figures

In summary, here are some key data and figures that illustrate Ford’s current situation and future plans:

• The Model e division expects losses of 5.5 billion dollars by the end of 2024.
• The first quarter of the year recorded a deficit of 1.3 billion dollars.
• Starting July 1, all U.S. dealerships will be able to sell electric vehicles.
• The Almussafes plant in Spain will lay off 1,600 workers.
• The 100% electric Ford Explorer will be launched in Europe soon.
• The Ford Capri will be presented on July 10, 2024.
• Ford’s new strategy will focus on small and reasonably priced electric vehicles.

Looking to the future

Ford is taking bold and necessary actions to correct the mistakes made in its electrification strategy. Although the challenges are enormous, the company is determined to transform its position in the electric vehicle market.

The adaptation of the dealership network in the United States and the adjustments in Europe are just the beginning. The new launches and the specific platform for accessible electric vehicles are crucial steps toward a more sustainable and profitable future.

As an automotive design and mechanics enthusiast, I will closely follow these developments and keep an eye out for upcoming news. Ford has acknowledged its mistakes and is acting to correct them. Only time will tell if these decisions will reverse the losses and place Ford on the path to success.

Summary table of losses and key adjustments