Ford is losing 100 million kroner every day on electric cars. To reduce some of the losses, the director has stopped development of a new electric SUV.
Ford has decided to stop development of a new electric car to reduce serious financial losses. Every day, the car brand loses 100 million kroner in the department of electric cars – also known as Model-e.
The halt to development of a new seven-seat SUV comes in response to a decline in demand for electric vehicles in several countries, and is also prompting the American brand to adjust its overall goals when it comes to electric vehicles.
Bloomberg writes.
Ford previously had a goal of producing two million electric cars annually by 2026, but that goal has now been abandoned, according to Bloomberg.
The brand's managing director Jim Farley says he has ordered development to be shut down because the seven-seater car will not add anything to the bottom line.
Right now, Ford's top priority is to significantly reduce all costs when it comes to electric cars.
Chairman Bill Ford says the company is working intensively to make electric cars more affordable.
To achieve that goal, Ford has hired a former Tesla executive whose sole task is to assemble a team of engineers to develop a series of new electric cars at a price of under $30,000. That's the equivalent of 216,000 Danish kroner.
In comparison, Volkswagen claims that they are on the way with at least one electric car for 20,000 euros. In Danish currency, this corresponds to 150,000 kroner. The Germans hope that the one car alone can erase their enormous debt. Read more about it here .
At the same time, Ford is investing in electric cars with range extenders, where a gasoline engine constantly keeps the battery charged. In theory, this should cure any range anxiety.
Ford's scrapping of a new electric car reflects the challenges that car brands in general are facing at the moment. Many of them are struggling to make any money from electric cars. At the same time, more and more car brands are pushing each other out of the market.
Xpeng CEO Xiaopeng He, for example, has no doubt that several, especially Chinese, car brands will fail within just 10 years. The period between 2025 and 2027 will be particularly tough, he says.
– From 300 start-ups, there are now fewer than 50 companies in existence, and only 40 of them actually sell cars each year.
“I personally believe that there will only be seven major car companies left in ten years,” he explained to The Straits Times.
