Following one of the biggest trends in automotive, Ford is rapidly transitioning to electric vehicles. Its success in the European market is riding on it.
Having struggled for years in Europe, where it has only a 5% share of the passenger car market, the iconic American carmaker wants to invigorate its business and generate steady profits in the region. By this point, electrification is a prerequisite for success in the European automotive market. Government subsidies have made electric vehicles (EVs) much more affordable for consumers, while tough new limits on carbon emissions make them a necessity for carmakers.
“We are going all in on electric vehicles,” said Stuart Rowley, President of Ford of Europe. The company announced on February 17 that its European division will start phasing out traditional fossil fuel-powered vehicles soon. Its goal is to offer only electric and plug-in hybrid cars by 2026, and by 2030, transition all of its passenger cars to electric. Central to Ford’s strategy is a $1 billion investment to retrofit its main European plant, located in Cologne, Germany, to produce EVs.
Even more fast-tracked are the delivery vans and commercial vehicles produced by Ford of Europe. These are set to transition to electric or plug-in hybrid models by 2024, with the European division’s entire range making the move by 2026. According to the New York Times, Ford will continue to sell fossil-fuelled commercial vehicles in Europe “for years to come,” though two-thirds will be battery powered by 2030. “There will still be demand for conventionally power vehicles,” Rowley said.
Ford currently sells its battery-powered Mustang Mach-E in Europe, where surging demand for EVs has created a bright spot in an industry battered by the pandemic. The first new model at Ford’s Cologne manufacturing plant is scheduled to go into production in 2023. It will use electric vehicle technology developed by Volkswagen.
Worldwide, the majority of automotive industry players are changing their manufacturing operations to support EV production. In January General Motors said it plans to complete its transition to only EVs by 2035, though it pulled out of Europe in 2017 after decades of diminishing returns. Britain’s Jaguar Land Rover announced recently that all of its Jaguar luxury cars and 60% of it Land Rover SUVs will run solely on batteries by 2030.