Ford executives emphasized that the company isn’t cutting back its spending on future electric vehicle models. But it now plans to ramp up its EV manufacturing capacity, and its spending on that capacity, more gradually than previously planned.
“We’re not moving away from our second generation [EV] products,” CFO John Lawler said in a media briefing Thursday. “We are, though, looking at the pace of capacity that we’re putting in place. We are going to push out some of that investment.”
This sounds, frankly, awful: They’re going to front all the development and then mostly sit on these designs, scaling slower than anticipated. I don’t see they have any other choice, but hoooboy is this going to be capital-inefficient.
Right? Without some internal data, this strategy seems suspicious. I’d like to see the internal math they ran comparing this approach versus cancelling some products while ramping up production as planned on the remaining products.
I suppose their internal numbers show demand is weak for all of their EV products, with none being able to sustain sales at elevated production levels. In other words, the only way they can plausibly increase EV sales is to diversify their EV product offerings with several low-volume models. That doesn’t seem sustainable.
Interesting detail:
This sounds, frankly, awful: They’re going to front all the development and then mostly sit on these designs, scaling slower than anticipated. I don’t see they have any other choice, but hoooboy is this going to be capital-inefficient.
Right? Without some internal data, this strategy seems suspicious. I’d like to see the internal math they ran comparing this approach versus cancelling some products while ramping up production as planned on the remaining products.
I suppose their internal numbers show demand is weak for all of their EV products, with none being able to sustain sales at elevated production levels. In other words, the only way they can plausibly increase EV sales is to diversify their EV product offerings with several low-volume models. That doesn’t seem sustainable.