Ford, the famous US company, recently pledged that all cars sold in Europe will be electric by 2030. It even said that it would be investing a total sum of $1 billion to help transform the company’s Cologne facility in Germany into an electric field centre. The company currently dominates the US market for petrol-powered commercial vehicles with a 40% share of the market as well as the European market with a 15% share. One of the main motivations for creating electric vehicles as opposed to petrol or diesel vehicles is to meet the CO2 emission targets set by the governments around the world as part of COP 26. In fact, the UK has already announced that it will ban the sale of new vehicles (cars and vans) entirely powered by petrol from 2030.
Given these government demands, Ford is pushing forward to make all cars in Europe electric by 2030. Ford has announced that it plans to make seven new models by 2024 in Europe and aims for 600,000 electric vehicle sales in Europe by 2026. This is an extremely ambitious target considering that the Mustang Mach E model, which is currently the sole model on sale, only had a sale of around 23,000 units last year. However, the pandemic has potentially played a role in reducing the number of sales last year due to people being made redundant and individuals being reluctant to spend. Now that the effects of the pandemic are starting to fade out, high consumption of vehicles may resume.
SK On, a South Korean battery-making company, has signed a memorandum of understanding (MOU – a formal document outlining an agreement made by two or more parties) with Ford and Koc Holdings to form a joint venture to produce battery cells for electric vehicles in Turkey. The aim is to start this by 2025. However, the current conflict between Russia and Ukraine may hinder production and slow down this process altogether. It may also make the whole process more expensive, meaning Ford’s new electric vehicles may be even higher and unaffordable to many consumers. Considering all this, will Ford be able to reach its target goal?