Ford’s latest attempt at platform commonality. Click to Enlarge.*
Ford Motor finally embraced conventional industry wisdom today – the future is electronic and digital – at an event for investors hyped as “Delivering Ford+.” It also attempted to counter the widespread opinion that it is behind the industry in its move toward electrification. (GM Doubles Down on EVs in Bid to Win Global Race, Volvo to Only Sell EVs Online as a Pure EV Company by 2030, Toyota, Subaru at Shanghai Introduce Latest Joint-Venture EVs)
Ford claims it is breaking away from a “transactional, build-and-sell business model” that it has used for decades. Instead, Ford+ is characterized by “close, enduring customer relationships – enabled by the company’s foundational strengths, improving financial performance, and capabilities and investments in disruptive technologies.”
Well, one wild card is the great unknown about the future of internal combustion engines that Ford is heavily dependent on. Will the change to EVs mean big write offs or mark downs of the value of existing plants, tooling and the elimination of jobs? Another potentially negative is Ford’s dismal record of introducing and then incurring huge warranty costs of complex vehicles with electronics. It has cost stockholders billions of dollars. Fixing these huge warranty costs is potentially worth $1-$2 billion annually given recent history.
At the core of the latest reorganization is “Blue Oval Intelligence, Ford’s next-generation, cloud-based platform for integrating electrical, power distribution, computing and software systems in connected Ford and Lincoln vehicles.”
Ford CEO Jim Farley said, “our customers, who will get new and better experiences by pairing our iconic, world-class vehicles with connected technology that constantly gets better over time. We will deliver lower costs, stronger loyalty and greater returns across all our customers…This is our biggest opportunity for growth and value creation since Henry Ford started to scale the Model T, and we’re grabbing it with both hands.”
Ford also said or predicted that:
- The Ford+ plan for growth and value creation based on ‘always-on’ customer relationships and leadership in electric vehicles, connected services;
- 40% of Ford global vehicle volume to be all-electric by 2030; raises planned electrification spending to $30+ billion by 2025, including development of IonBoost batteries. Battery cost will come down and Ford will be at $80 per Kilowatt Hour by December;
- A newly announced creation of Ford Pro vehicle services and distribution business, which is “fully dedicated to high productivity requirements of commercial and government customers.”
CFO John Lawler said Ford is allocating capital to those priority areas to produce value for customers and shareholders. “We’re fueling Ford+ by further strengthening our core automotive operations and generating consistently healthy cash flow that will fund growth and create value,” said Lawler. The company confirmed its previous forecast of an expected 8% adjusted EBIT (earnings before interest and taxes) margin in 2023. It expects to earn between $5.5B and $6B this year and generate $1.0 to 1.5 billion in cash.
Ford, which already has the world’s most popular pickup trucks and vans, says it now plans to redefine success for those customers with Ford Pro – a global vehicle services and distribution business that “will increase uptime and reduce ownership costs, leading to higher productivity and performance.”
The new business – separate within Ford and arguably the first of its kind among automakers – is a major outcome of the Ford+ plan for growth and value creation, which is based on building “always-on” customer relationships.
“Ford Pro will redefine the market for commercial vehicles and services, where Ford is already the leader around the world,” said Ford CEO Jim Farley. “We’re creating a one-stop shop to help those customers increase uptime and productivity while reducing complexity and the total cost of ownership.”
A potential strength of Ford Pro is its flexible range of F-Series and Ranger trucks, as well as Transit, the world’s best-selling cargo van – and the upfitting of all of them. Ford will start making high-volume electric vehicles, including the E-Transit later this year and the F-150 Lightning Pro in mid-2022, which Ford Pro will pair with commercially focused charging solutions.
In addition to expected benefits for customers, Ford Pro’s ambitions for itself are significant. The company anticipates its growing capabilities and appeal to generate $45 billion in revenue from hardware and adjacent and new services by 2025 – up from $27 billion in 2019. In North America, Ford’s share of Class 1 through Class 7 full-size trucks and vans today exceeds 40%. In Europe, Ford has been the leading commercial vehicle brand for six consecutive years.
Farley said Ford Pro will be led by Ted Cannis as CEO. Cannis will collaborate with Hans Schep, general manager of Commercial Vehicles for Ford of Europe, and other regional leaders. Cannis currently heads Ford’s North America CV business and previously was leader of the Team Edison electric-vehicle development group.
Ford Pro will integrate, digitize and simplify transportation with capabilities spanning:
- 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 fleets
- 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 been introduced and are now being expanded in Europe, among them the recently launched Ford Fleet Management and Ford Pro Liive (sic). The latter is a connected uptime system expected to reduce downtime of customer fleets by up to 60%. Such enhanced services are generating higher levels of customer satisfaction and loyalty, and growth for Ford. Ford Pro will initially launch in North America and Europe.
Crucial here – and across the industry – is battery technology. Lower cost batteries and equipping Ford to design, engineer and manufacture its own batteries are underway:
- Creating Ford Ion Park, a global center of battery excellence comprising more than 150 experts in battery chemistries, testing, manufacturing and value-chain management who will boost battery range and lower costs to customers and Ford
- Vertically integrating battery technology with an extensive range of EV batteries – IonBoost lithium ion; IonBoost Pro lithium iron phosphate for commercial vehicles; and long-range, low-cost solid-state batteries based on Ford’s own engineering and know-how from Solid Power, in which the company holds an equity stake, and
- Forming a joint venture, BlueOvalSK, with SK Innovation to manufacture battery cells and arrays at two plants in the U.S. for future Ford and Lincoln vehicles.
AutoInformed on Ford Motor
*Hau Thai-Tang, chief product platform and operations officer, said Ford will offer two new EV architectures: a rear-wheel/all-wheel-drive platform, and a platform dedicated to full-size pickups.
Ford to Up Electrification Spend to $30B by 2025. Wants 40% All-Electric Global Volume By 2030
Ford’s latest attempt at platform commonality. Click to Enlarge.*
Ford Motor finally embraced conventional industry wisdom today – the future is electronic and digital – at an event for investors hyped as “Delivering Ford+.” It also attempted to counter the widespread opinion that it is behind the industry in its move toward electrification. (GM Doubles Down on EVs in Bid to Win Global Race, Volvo to Only Sell EVs Online as a Pure EV Company by 2030, Toyota, Subaru at Shanghai Introduce Latest Joint-Venture EVs)
Ford claims it is breaking away from a “transactional, build-and-sell business model” that it has used for decades. Instead, Ford+ is characterized by “close, enduring customer relationships – enabled by the company’s foundational strengths, improving financial performance, and capabilities and investments in disruptive technologies.”
Well, one wild card is the great unknown about the future of internal combustion engines that Ford is heavily dependent on. Will the change to EVs mean big write offs or mark downs of the value of existing plants, tooling and the elimination of jobs? Another potentially negative is Ford’s dismal record of introducing and then incurring huge warranty costs of complex vehicles with electronics. It has cost stockholders billions of dollars. Fixing these huge warranty costs is potentially worth $1-$2 billion annually given recent history.
Ford CEO Jim Farley said, “our customers, who will get new and better experiences by pairing our iconic, world-class vehicles with connected technology that constantly gets better over time. We will deliver lower costs, stronger loyalty and greater returns across all our customers…This is our biggest opportunity for growth and value creation since Henry Ford started to scale the Model T, and we’re grabbing it with both hands.”
Ford also said or predicted that:
CFO John Lawler said Ford is allocating capital to those priority areas to produce value for customers and shareholders. “We’re fueling Ford+ by further strengthening our core automotive operations and generating consistently healthy cash flow that will fund growth and create value,” said Lawler. The company confirmed its previous forecast of an expected 8% adjusted EBIT (earnings before interest and taxes) margin in 2023. It expects to earn between $5.5B and $6B this year and generate $1.0 to 1.5 billion in cash.
Ford, which already has the world’s most popular pickup trucks and vans, says it now plans to redefine success for those customers with Ford Pro – a global vehicle services and distribution business that “will increase uptime and reduce ownership costs, leading to higher productivity and performance.”
The new business – separate within Ford and arguably the first of its kind among automakers – is a major outcome of the Ford+ plan for growth and value creation, which is based on building “always-on” customer relationships.
“Ford Pro will redefine the market for commercial vehicles and services, where Ford is already the leader around the world,” said Ford CEO Jim Farley. “We’re creating a one-stop shop to help those customers increase uptime and productivity while reducing complexity and the total cost of ownership.”
A potential strength of Ford Pro is its flexible range of F-Series and Ranger trucks, as well as Transit, the world’s best-selling cargo van – and the upfitting of all of them. Ford will start making high-volume electric vehicles, including the E-Transit later this year and the F-150 Lightning Pro in mid-2022, which Ford Pro will pair with commercially focused charging solutions.
In addition to expected benefits for customers, Ford Pro’s ambitions for itself are significant. The company anticipates its growing capabilities and appeal to generate $45 billion in revenue from hardware and adjacent and new services by 2025 – up from $27 billion in 2019. In North America, Ford’s share of Class 1 through Class 7 full-size trucks and vans today exceeds 40%. In Europe, Ford has been the leading commercial vehicle brand for six consecutive years.
Farley said Ford Pro will be led by Ted Cannis as CEO. Cannis will collaborate with Hans Schep, general manager of Commercial Vehicles for Ford of Europe, and other regional leaders. Cannis currently heads Ford’s North America CV business and previously was leader of the Team Edison electric-vehicle development group.
Ford Pro will integrate, digitize and simplify transportation with capabilities spanning:
Some elements of Ford Pro commercial services have been introduced and are now being expanded in Europe, among them the recently launched Ford Fleet Management and Ford Pro Liive (sic). The latter is a connected uptime system expected to reduce downtime of customer fleets by up to 60%. Such enhanced services are generating higher levels of customer satisfaction and loyalty, and growth for Ford. Ford Pro will initially launch in North America and Europe.
Crucial here – and across the industry – is battery technology. Lower cost batteries and equipping Ford to design, engineer and manufacture its own batteries are underway:
AutoInformed on Ford Motor
*Hau Thai-Tang, chief product platform and operations officer, said Ford will offer two new EV architectures: a rear-wheel/all-wheel-drive platform, and a platform dedicated to full-size pickups.