Ford Motor Co. will drastically overhaul its business in Europe, where it didn’t sell a single fully electric vehicle last year, vowing to go almost completely electric by the end of the decade.
One of the first steps in the transformation announced Wednesday will be to plow $1 billion (U.S.) into a German assembly plant that will start making an all-electric model in two years. By mid-2026, Ford will offer plug-in hybrid or fully electric models across its entire lineup.
By 2030, Ford’s passenger-vehicle range will be all-electric — one of the more demanding road maps among Europe’s major incumbent carmakers. Only its smaller but strategically important commercial-vehicle business will sell some vans and trucks that lack a plug by then.
“Consumers increasingly want us to go electric,” Ford Europe president Stuart Rowley said in an interview. “Our customers are very focused on sustainability and they want the brands and companies they work with to go on this journey with them.”
As ambitious as Ford’s plan is, it has less to lose in Europe after having substantially scaled back in the region. The company has taken more than $1 billion of structural costs out of local operations the last two years, closing five factories, selling another and eliminating more than 10,000 jobs. It fell behind Toyota and Fiat Chrysler to rank ninth in passengervehicle sales last year, according to the European Automobile Manufacturers’ Association.
Chief executive officer Jim Farley is trying to turn the page on his predecessor Jim Hackett’s tenure that focused on restructuring by putting Ford more on the offensive.
Farley announced plans this month to almost double the automaker’s EV budget to $22 billion through the middle of this decade just after General Motors Co. said it aims to sell only zero-emission models by 2035.
“We continue to be encouraged by a higher sense of urgency and focus, especially with respect to electrification where Ford seems to be trying to catch up to other automakers’ goals,” Joe Spak, an analyst at RBC Capital Markets, said in a note to clients.
Ford shares were little changed shortly after the start of regular trading in New York. The stock has surged more than 30 per cent this year, driven by optimism about its EV efforts.
Ford’s investment in Cologne, Germany, will modernize a 90year-old plant that is one of the largest manufacturing complexes in Europe. The automaker will share more details in the coming months on its plans for the facility, which currently assembles Fiesta small cars. Ford will continue production of that model in parallel with a new EV for some time before eventually going all-electric.
Europe became the epicentre of EV adoption last year, with carmakers selling more fully electric and plug-in hybrid vehicles there than in China for the first time.
The surge was driven by stricter emissions standards, subsidies that helped the industry recover from pandemic-related disruptions and introductions of new models to meet more stringent rules in the coming years.
“You’re really seeing the European industry move,” Rowley said.
Ford needed help complying with Europe’s CO2 limits last year because of fire issues with the plug-in hybrid version of its Kuga sport utility vehicle. It reached a deal in October to pool its fleet with Volvo Cars.
A partnership with Volkswagen AG will help Ford electrify its fleet going forward. Sharing technology and development costs with VW will be key to Ford keeping its earnings momentum going in Europe.