Ford is putting “everything on the table” to keep up with Tesla and fast-rising Chinese EV makers like BYD. In a new memo, Ford asked suppliers to cut EV costs after its Model e unit continued to bleed billions in Q1.
Like many rivals, Ford introduced significant price reductions to keep up with Tesla’s price cuts. Although the move has helped boost demand, it’s also costly.
For example, after dropping Mustang Mach-E prices 17% earlier this year, volume shot up by 141%.
Ford’s Mustang Mach-E was the second best-selling electric SUV last quarter, behind Tesla’s Model Y, with 9,589 units sold. That’s up 77% over Q1 2023. The F-150 Lightning remained the top-selling electric pickup in the US, with 7,743 models sold (+80% YOY).
All Ford electric vehicles saw double-digit (or triple-digit) growth in Q1, with E-Transit sales up 148% (2,891).
However, in its first-quarter earnings last month, Ford revealed its Model e EV business lost another $1.3 billion. The loss comes after Model e posted a net loss of around $4.7 billion last year.
The automaker expects the losses to continue piling up, with Model e projected to lose another $5.5 billion this year.
Ford has already delayed several projects, including its three-row electric SUV, as it works to “substantially reduce the costs of the batteries,” according to CEO Jim Farley.
Farley believes the company can better compete with smaller, more affordable EVs. As a result, Ford is shifting funding (including around $12 billion in EV investments) to optimize profitability.
Ford is asking suppliers to cut EV costs
Ford’s CEO stressed that Model E needs to “stand on its own.” To do so, Ford has already implemented several cost-cutting measures.
Its most recent is to work with its suppliers. In a recent memo (obtained by Crain’s Detroit Business), Ford asked suppliers to help cut EV costs as it works toward profitability.
“We have all invested heavily in the success of the EV business, and we will all win or lose together,” stressed Ford’s chief supply chain officer, Liz Door. “To enable affordability, it is of paramount importance that our EV portfolio achieves further levels of material cost efficiency.”
In the note, Ford asked its suppliers to create “incremental cost-reduction proposals” for current and next-gen EVs. These include the F-150 Lightning, Mustang Mach-E, E-Transit, and P800 electric pickup and Ford’s larger electric SUV.
“We need your best ideas to drive cost reduction, even if they have been previously rejected by Ford,” Door said. With “Everything on the table,”
Ford is seeking investment ideas that support profitability. Examples of investments could include “commercial, design, content, footprint, and value chain” actions.
The actions could also involve “adjusting capacity downward where necessary, repurposing capital as needed, understanding spending curves and discussing all options,” the memo stated.
Electrek’s Take
Ford is looking for anything to slow its EV unit from bleeding billions of dollars. The company expects every new EV to make money in the first 12 months of launching. To do so, working with suppliers will be critical.
Rivian is another company that has worked with its suppliers to gain control of costs. The EV maker invited supplier partners to its Normal, IL manufacturing plant to discuss win-win opportunities to cut costs.
Meanwhile, Ford is following Toyota with plans to introduce more hybrids as a bridge to its next-gen vehicles. A move that could set it further behind in the long-run.
If you’re in the market for a new EV, Ford’s recent price cuts make the Mach-E and F-150 Lightning even more attractive. You can use our links below to view deals on Ford’s electric vehicles in your area.
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The Top Gear TV show might be over, but its tamed racing driver – a masked, anonymous hot shoe known only as “the Stig” – lives on … and his latest adventure involves pitching the 1,400 hp electric Ford SuperVan demonstration vehicle around the famed Top Gear test track. Sideways.
In this video from the official Top Gear YouTube channel (is Top Gear just a YouTube show, now?), the boxy Ford racer seems to have sprouted an additional 600 peak horsepower in its latest “4.2” iteration, for a stout 2,000 hp total. For his (?) part, the Stig puts all of those horses to work in what appears to be a serious attempt to take the overall track record.
I won’t spoil the outcome for you, but suffice it to say that even the most die-hard anti-EV hysterics will have to admit that SuperVan is a seriously quick machine.
SuperVan 4.2: How fast can a 2000 hp transit go?
[SPOILERS AHEAD] Even with 2,000 hp, instant torque, and over 4,000 lbs. of aerodynamic downforce, the SuperVan wasn’t able to beat the long-standing 1st and 2nd place spots held by the Renault R24 (a legit Formula 1 race car) and the Lotus T125 Exos (a track-only special that sure looks like a legit Formula 1 race car), but after crossing the line with a time of 1:05.3, the Ford claims third place on the overall leaderboard.
You can check out the video (above) and watch the whole segment for yourself, or just skip ahead to the eight-minute mark to watch the tire-shredding sideways action promised in the headline. If you do, let us know what you think of Ford’s fast “van” in the comments.
Swedish multinational Sandvik says it’s successfully deployed a pair of fully autonomous Toro LH518iB battery-electric underground loaders at the New Gold Inc. ($NGD) New Afton mine in British Columbia, Canada.
The heavy mining equipment experts at Sandvik say that the revolutionary new 18 ton loaders have been in service since mid-November, working in a designated test area of the mine’s “Lift 1” footwall. The mine’s operators are preparing to move the automated machines to the mine’s “C-Zone” any time now, putting them into regular service by the first of the new year.
“This is a significant milestone for Canadian mining, as these are North America’s first fully automated battery-electric loaders,” Sandvik said in a LinkedIn post. “(The Toro LH518iB’s) introduction highlights the potential of automation and electrification in mining.”
The company says the addition of the new heavy loaders will enable New Afton’s operations to “enhance cycle times and reduce heat, noise and greenhouse gas emissions” at the block cave mine – the only such operation (currently) in Canada.
Electrek’s Take
From drilling and rigging to heavy haul solutions, companies like Sandvik are proving that electric equipment is more than up to the task of moving dirt and pulling stuff out of the ground. At the same time, rising demand for nickel, lithium, and phosphates combined with the natural benefits of electrification are driving the adoption of electric mining machines while a persistent operator shortage is boosting demand for autonomous tech in those machines.
European logistics firm Contargo is adding twenty of Mercedes’ new, 600 km-capable eActros battery electric semi trucks to its trimodal delivery fleet, bringing zero-emission shipping to Germany’s hinterland.
With the addition of the twenty new Mercedes, Contargo’s electric truck fleet has grown to 60 BEVs, with plans to increase that total to 90. And, according to Mercedes, Contargo is just the first.
Contargo’s 20 eActros 600 trucks were funded in part by the Federal Ministry for Digital Affairs and Transport as part of a broader plan to replace a total of 86 diesel-engined commercial vehicles with more climate-friendly alternatives. The funding directive is coordinated by NOW GmbH, and the applications were approved by the Federal Office for Logistics and Mobility.