The car maker is to invest US$29bn in the space which, for context, compares to a US$2.8bn net loss for the fourth quarter.
With some US$22bn earmarked for electrification Ford is investing almost double it prior funding into the fast growing market which is thus far dominated, if not monopolised, by Elon Musk’s Tesla.
That Tesla has so dramatically surpassed Ford to become the world’s ‘biggest’ motor company (only when measured in market capitalisation) – with US$44bn Ford dwarfed by Elon’s US$805bn behemoth – reflects that this is shaping up to be a battle for the future of the vehicle industry.
Indeed, the Detroit motor company’s investment plans came with a little fighting talk.
“If EVs continue to quickly gain favor, especially with commercial customers, we want to be clear that we will not cede ground to anyone,” John Lawler, Ford chief financial officer said on a call following the Q4 results.
Chief executive Jim Farley, meanwhile, added some detail to Ford’s investment plans which include the development of battery technologies to expand capacities and the development of new electric vehicles.
Previously, Ford invested US$11.5bn in its fuel-electric hybrid vehicles, and, the company indicates the new larger investment would overwhelmingly focus on full EVs.
The company said yesterday that it has decided not to pursue plans to launch an EV joint venture with China’s Zotye Automobile, although last week said it has agreed a joint venture with Chongqing Changan Automobile to start making its all-electric Mustang Mach-E model.
Thursday’s quarterly results marked a US$2.8bn loss for the three months, to swing full year financials into the loss column.
Ford was expecting to make a full year profit of US$600mln to US$1.1bn, instead it reported a US$1.3bn net loss. Revenue in the period amounted to US$127bn, down from US$156bn.
The results included charges for vehicle recalls, impacts for pensions, and the shut down of Brazilian manufacturing.
Excluding such charges Ford made 34 cents per share operating profit, beating market consensus.
It forecast between US$8bn and US$9bn of operating earnings for 2021.
Ford stock climbed 1.52% to close Thursday at US$11.37.