Jim Farley, Ford CEO, speaks to reporters outside the company’s headquarters in Dearborn, Michigan on May 19 following the debut of the F-150 Lightning electric pickup truck
Michael Wayland / CNBC
Ford engine On Wednesday, the company expects electric vehicles to account for nearly half of its global sales by 2030 as part of the company’s most recent turnaround plan.
The plan is to increase investments in electric vehicles to over $ 30 billion by 2025.
Ford announced the plans during its first investor day under CEO Jim Farley, who took over the helm of the automaker on October 1st. The highly anticipated event will focus on Farley’s new “Ford +” plan to turn its business around and expand into emerging markets such as connected vehicles and subscription services.
“This is our greatest opportunity for growth and value since Henry Ford began scaling the Model T, and we are grasping it with both hands,” said Farley.
Ford shares hit a new 52-week high in intraday trading Wednesday morning. The stock rose more than 8% to about $ 13.85 per share. The market capitalization is around $ 54 billion.
The increased investment in electric vehicles rose from $ 22 billion The company announced in February that it has invested around $ 7 billion since 2016.
Hau Thai-Tang, Ford’s chief product platform and operations officer, aimed at GM during the investor event: “This is not a future Ford claim,” he said of connected electric vehicles like the Mustang Mach-E crossover.
With vehicle connectivity and expected battery breakthroughs, Thai-Tang believes the EV business can be more profitable over time than the current business.
Under Farley’s Ford + plan, the company hopes to achieve an adjusted profit margin of 8% before interest and taxes in 2023. Farley’s predecessor, Jim Hackett and Mark Fields promised the same thing, but it never materialized.
“We’re sailing a much tighter ship,” Farley said after discussing the automaker’s failure to live up to Wall Street’s expectations in recent years.
Hackett and Fields were criticized by Wall Street Because they didn’t set out their plans in detail after then CEO Alan Mulally saved the company from bankruptcy during the Great Recession.
Farley’s overarching plan is reminiscent of a high profile restructuring plan and rally call Mulally called “A Ford”.
“I’m excited to see what Ford + means for our customers who will have new and better experiences by combining our iconic world-class vehicles with connected technology that just keeps getting better over time,” Farley said in a statement. “We will bring lower costs, higher loyalty and higher returns to all of our customers.”
Before the coronavirus pandemic, Ford’s adjusted profit margin was 4.1% in 2019, followed by 2.2% in 2020. Due to an imbalance in supply and demand for new vehicles due to an ongoing global situation Shortage of semiconductor chipswas increased to 13.3% in the first quarter of this year.
Ford also said Wednesday that it expects to grow revenue from its commercial business to $ 45 billion by 2025, up from $ 27 billion in 2019, including “hardware and related and new services”
addressable by Ford. “
The automaker will create “Ford Pro”, a new vehicle service and distribution business within the automaker “dedicated to commercial and government customers.”
Farley said the new trading business will be part of the company but operate as a standalone business.
Expanding the Ford dealership and fleet of connected vehicles was a priority for the Farley automaker.
Such a connected fleet could compete with its biggest American rival, GM, which expects more than 7 million of its vehicles worldwide to be able to perform OTA updates by 2023.
Farley said the company plans to electrify its most famous nameplates, which has led some analysts to wonder if the company will offer an electric version of its nameplates upcoming Bronco SUV.
Ford said on Wednesday it has 70,000 reservations for the F-150 Lightning, from 44,500 from Friday morning.
“In the BEV era, Ford will not cede truck management to anyone,” said Lisa Drake, Ford’s chief operating officer for North America, on Wednesday. “Our plan is to win the electric revolution.”
Regarding autonomous vehicles, Ford CFO John Lawler re-affirmed the company’s plans to create a commercial self-driving company by 2022.
He declined to discuss further details and said the company plans to hold a future event on the matter.
Argo is testing its self-driving technology in six US cities with Ford vehicles. The company was unveiled earlier this month its own lidar, Many believe that this is the key technology for commercializing autonomous vehicles.