Ford is increasing its investment in electric and self-driving vehicles to $ 29 billion, the company’s top executives said in a earnings call on Thursday. The automaker had already pledged to spend $ 11.5 billion on electrifying its line of vehicles by 2022. Now, Ford says it will spend twice that amount, while extending the timeline to 2025.
The automaker will spend $ 7 billion on autonomous vehicles and $ 22 billion on electric vehicles. That $ 22 billion includes $ 7 billion that the company has spent since 2016.
Ford said most of the vehicles it plans to produce will be battery-powered electric vehicles, but the company also has hybrid and plug-in hybrid models that also have traditional internal combustion engines. The company launched a fully electric Transit van last year and plans to launch an electric version of its best-selling F-150 pickup later this year.
Ford’s new CEO Jim Farley praised the company’s increased investment as a “more aggressive” plan to position the country’s oldest automaker as a leader in the future of mobility and transportation. Farley cited Ford’s recent announcement that it would work with Google to integrate the tech giant’s Android software into “millions” of vehicles starting in 2023 as a representative of the type of businesses involved in Ford’s pivot for a more digital future.
The increase in investment aims to convince those on Wall Street who are nervous about Ford’s ability to reach Tesla, which has been the only automaker to successfully build an EV business in recent years. Ford is keeping pace with other old car makers, such as GM and Volkswagen, having just started delivering its long-awaited Mustang Mach-E to customers last year – although a quality review issue has delayed hundreds of additional deliveries in the last month.
Most major automakers said last year that they planned to move to all-electric lines. Daimler AG, the parent company of Mercedes-Benz (Daimler itself will soon be renamed Mercedes-Benz), said it will produce electrified versions of all its cars by 2022. Volvo has announced that it would begin to eliminate production of powered cars only on gas in 2019, while the Volkswagen Group will make everything electric in some way or form by 2030. And China’s growing prominence in the automotive market, in addition to the country’s restrictions on the manufacture of fossil fuel vehicles, is certainly putting pressure on the whole the industry to become electric.
Ford is not even the only automaker to greatly increase its bet on the electric. At the end of last year, GM said it would spend $ 27 billion on electric and self-driving vehicles by 2025 – up from the $ 20 billion announced before the COVID-19 pandemic.