Ford Motor Co. keeps moving the goalposts on its own when it comes to electrification, CEO Jim Farley telling investors and analysts Wednesday the company will spend more than $30 billion on electrified vehicle development by 2030.
Farley calls the accelerated plan “Ford+,” and it not only pushes the automaker to bigger goals for electrification, but profitability at the same time, he revealed during its Capital Markets Day.
“This is our biggest opportunity for growth and value creation since Henry Ford started to scale the Model T,” Ford Chief Executive Jim Farley said at the company’s Capital Markets Day meeting online. “Our ambition is to lead the electric revolution.”
Shareholders clearly liked the idea of a revolution, the company’s shares closed up 8.5% to $13.90 and continues rising in afterhours trading crossing the $14-per-share threshold.
You say you want a revolution?
Farley hit on three big points during the event: expanding and growing its electric vehicle development and product line-up, establishing its commercial business as a division and growing its connected services business — all in search of bigger profits.
The sexy part of the presentation centered on its expanded commitment to electrified vehicles. Last year at this time, Ford had committed $11.5 billion by 2022 to the “cause.” In February, it grew to $22 billion by 2025 and today Farley added another third to that total surpassing $30 billion invested by that time.
The plan calls for 40% of Ford’s global vehicle sales to be electric by 2030. That translates to about 1.5 million EVs globally. It puts it on pace with Detroit-based rival General Motors, which wants to sell 1 million electric vehicles annually by 2025. Other makers, like Hyundai, Toyota and Honda, for example, have all set similar targets.
Those numbers include the company’s commercial vehicles, such as the E-Transit commercial van hitting the road in Europe later this year and in the U.S. shortly after. The investment numbers also include its plans to develop and build batteries for those electric vehicles, including its new joint venture with South Korean battery maker SK Innovation dubbed BlueOvalSK and its plant in Georgia.
Automaker going professional
The event proved the ideal time for officials to reveal Ford Pro, its new global vehicle services and distribution business within Ford devoted to commercial and government customers. Ted Cannis is the new unit’s CEO and was named a corporate officer. He previously headed up the Ford’s North America commercial vehicle business and prior to that led its Team Edison EV development group.
“Ford Pro will redefine the market for commercial vehicles and services, where Ford is already the leader around the world,” Farley said. “We’re creating a one-stop shop to help those customers increase uptime and productivity while reducing complexity and the total cost of ownership.”
The company expects generate $45 billion in revenue from the unit by 2025, a significant jump from the $27 billion in 2019. The new group, which Ford claims represents the first time an automaker has rolled it out into its own entity, covers its Class 1 through Class 7 full-size trucks and vans and all of the connected services tied to them. It has five components, according to Ford, including:
- Ford Pro Vehicles – including Ford’s broad lineup of combustion-engine and hybrid commercial vehicles and, soon, all-electric versions of the company’s industry-leading vans and full-size pickup trucks developed for commercial use;
- Ford Pro Charging – hardware and software solutions for public, depot and overnight home charging of EVs so they’re ready to work again the next day;
- Ford Pro Intelligence – digital services, with distinct features integrated in their vehicles that enable customers to better manage and maintain their fleet;
- Ford Pro Services Elite – expanding Ford’s strong network of CV centers by adding 120 dedicated, large-bay service hubs across the United States with extended hours and rapid turnaround, plus introducing 1,200 mobile service vehicles by 2025 to meet customers where they are, save them money and get them back in business; and
- Ford Pro FinSimple – bundled financing for vehicles, services and EV charging.
Some elements of Ford Pro commercial services have already been introduced and are now being expanded in Europe, among them the recently launched Ford Fleet Management and Ford Pro Live.
The latter is a connected uptime system expected to reduce downtime of customer fleets by up to 60 percent. Such enhanced services are generating higher levels of customer satisfaction and loyalty, and growth for Ford.
Keeping everyone connected
Finally, the automaker looking to remain connected with owners. First it allows Ford to send out over-the-air updates to update, and in some cases upgrade vehicles. While isn’t really revolutionary these days as Tesla and others have been doing it for some time, Ford is looking to become leader of the pack by the middle of next year.
It expects to exceed Tesla’s volume by July next year and scale up to 33 million vehicles — both Ford and Lincoln — by 2028. However, it’s also looking to improve its “customer relationships” over the air as well, by offering services through the company’s FordPass and LincolnWay technologies.
Not only will future owners be able to handle scheduling repairs and vehicle pickup and delivery this way, they’ll be able to buy or lease a new vehicle, including handling financing or leasing deals from the driver’s seat.
All those partnerships with Amazon, Google and Apple are going to come into play as well as with consumers being able to tap into those resources for a variety of things the company describes as the “digital lifestyle.” It will allow owners, for example, to use Alexa for everything from setting up reminders or adding items to a shopping list to turning on lights inside their home as they approach.
Deploying distinctive connected functions like Ford’s BlueCruise driver-assist technologies, new features and upgraded software content, and EV charging to improve the user experience — and capitalize on what is projected to be a $20 billion market for such services by 2030.
The stock market seems to reward plans over profits.