Ford Goes 'All In' on Autonomous Electric Vehicles... 32 Trillion Won Investment by 2025

24 Trillion Won Invested in Electric Vehicles, 8 Trillion Won in Autonomous Vehicles
F-150 Factory Begins Production Cuts Amid Car Semiconductor Shortage Impact

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kim Suhwan] American automaker Ford plans to focus its entire capabilities on autonomous vehicles and electric vehicles. This is interpreted as a strategy to maintain leadership amid fierce technological competition surrounding autonomous and electric vehicles within the industry.

On the 4th (local time), Ford announced its investment roadmap for autonomous and electric vehicles through 2025 along with its earnings report. According to the earnings report, Ford recorded $36 billion (approximately 40 trillion KRW) in revenue and an operating loss of $2.8 billion (approximately 3 trillion KRW) in the fourth quarter of last year. A Ford representative stated, "Operating losses were inevitable due to decreased automobile demand caused by the COVID-19 pandemic and restructuring over the past year," adding, "We will enhance growth potential through fundamental reforms by expanding investments in electric and autonomous vehicles."

Ford plans to invest $22 billion (approximately 24.6 trillion KRW) in electric vehicles and $7 billion (approximately 7.8 trillion KRW) in autonomous vehicles by 2025. This proactive investment is interpreted as a strategy to lead the competition in electric and autonomous vehicle development within the industry. Previously, Ford announced plans to invest $11.5 billion (approximately 12.9 trillion KRW) in autonomous and electric vehicle development by 2022. Jim Farley, Ford CEO, said at a press conference, "We will not yield leadership in electric and autonomous vehicles to anyone."

Additionally, Ford revealed plans to release some upcoming electric vehicles as hybrid cars as well.

Ford's large-scale investment plan is analyzed as a response to the autonomous vehicle investment plans announced by competing companies. Ford's competitor, General Motors (GM), also announced last year plans to invest about $27 billion (approximately 30 trillion KRW) in electric and autonomous vehicles by 2025.

Regarding the vehicle semiconductor supply bottleneck, Ford decided to reduce production at some factories. It announced production cuts for certain products, including the F-150 pickup truck, at factories in Michigan and Missouri. John Lawler, Ford's Chief Financial Officer, said, "The semiconductor supply situation is very fluid, so we need to monitor the production trends of our products going forward," adding, "For now, we may have to reduce production by up to 20% in the first quarter."

CNBC reported, "Ford's production cuts could reduce this year's operating profit by at least $1 billion (approximately 1 trillion KRW)," and evaluated, "Ford's autonomous vehicle investment plan announced today is a response to investors' demands for autonomous vehicle investments amid this situation."

Following the earnings announcement, Ford's stock price rose about 0.9% in after-hours trading.