Written by Abhirup Roy and Nora Eckert
(Reuters) – Ford Motor Co. said “everything is on the table” and urged electric vehicle suppliers to cut costs to support profitability, according to an internal memo seen by Reuters.
Ford has been forced to retaliate after competitors, including EV market leader Tesla, cut prices and slashed prices to maintain consumer demand amid high interest rates. Analysts say EV makers need to introduce cars that are affordable to the masses to reignite demand and stave off competition from Chinese automakers such as BYD.
“Everything is on the table. Think of this as a call to action,” Liz Doerr, Ford’s chief supply chain officer, said in the memo, as previously reported by Crain’s Detroit Business.
Doerr added, “It is in our best interest to be able to provide affordable EV products to our customers.” “To ensure affordability, it is paramount that our portfolio achieves additional levels of material cost efficiency.”
In response to a request for comment, Ford said it is focused on building a profitable EV business. “We value the collaboration of our suppliers and asked them to share their ideas for reducing costs,” the company said in a statement.
Door asked its suppliers to ensure efficient manufacturing operations and reduce capital expenditures. He also called for further cost-saving proposals to be presented in an upcoming in-person meeting for vehicles such as the Ford F-150 Lightning electric pickup in his truck, the Transit electric van and the Mustang in his Mach-E SUV. We support not only investment but also profitability.
The Dearborn, Michigan-based automaker posted a $1.3 billion operating loss in its EV and software divisions in the first quarter. Executives expect this division of the company to incur annual pretax losses of $5 billion to $5.5 billion.
Ford continues to develop affordable small EVs with its California “Skunk Works” team, but the company plans to move toward fully battery-powered vehicles in the near term that are preferred by many consumers. The company is focusing on increasing sales of hybrid vehicles.
(Reporting by Abhirup Roy in San Francisco and Nora Eckert in Vance, Alabama; Editing by Ben Klayman and Matthew Lewis)
