financetom
Business
financetom
/
Business
/
Ford asks suppliers to cut costs in push to turn EV business profitable, memo says
News World Market Environment Technology Personal Finance Politics Retail Business Economy Cryptocurrency Forex Stocks Market Commodities
Ford asks suppliers to cut costs in push to turn EV business profitable, memo says
May 16, 2024 1:40 PM

May 16 (Reuters) - Ford Motor Co ( F ) has asked its

electric-vehicle suppliers to reduce costs in an attempt to

support profitability, saying "everything is on the table,"

according to a company memo seen by Reuters.

Discounts and sharp price cuts from competitors, including

EV market leader Tesla, to sustain consumer demand amid

high interest rates have forced Ford to reciprocate. To

re-ignite demand and stave off competition from Chinese

automakers such as BYD, analysts have said EV makers

need to introduce vehicles that are affordable to the masses.

"Everything is on the table. Consider this a call to

action," Liz Door, Ford's chief supply-chain officer, said in

the memo, which was earlier reported by Crain's Detroit

Business.

"It is in our best interests that we are able to deliver

affordable EV products to our customers," Door added. "To ensure

affordability, it is of paramount importance that our portfolio

achieves further levels of material cost efficiency."

In response to a request for comment, Ford said it was

focused on building a profitable EV business. "We value our

suppliers' collaboration and asked them to share their ideas for

cost reductions," the company said in a statement.

Door asked suppliers to ensure efficient manufacturing

operations and reduce capital spending. She also called for

further cost-reduction proposals on such vehicles as the Ford

F-150 Lightning electric pickup truck, Transit electric van and

Mustang Mach-E SUV, to be presented in face-to-face meetings

soon, including ideas that might require investment but support

profitability.

The Dearborn, Michigan-based automaker recorded a $1.3

billion operating loss for its EV and software division in the

first quarter. Executives expect this section of the company to

sustain a pretax loss of between $5 billion and $5.5 billion for

the year.

While Ford continues to develop affordable and smaller EVs

by a "skunk works" team in California, the company in the near

term is focusing on boosting sales of hybrid vehicles, which are

preferred by many consumers, before adopting fully

battery-powered cars.

Comments
Welcome to financetom comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
Related Articles >
Pacira Biosciences Challenged by Court Ruling on Exparel, 'Uncertain' Prospects, RBC Say
Pacira Biosciences Challenged by Court Ruling on Exparel, 'Uncertain' Prospects, RBC Say
Aug 12, 2024
12:46 PM EDT, 08/12/2024 (MT Newswires) -- Pacira Biosciences ( PCRX ) faces an uncertain future after a federal judge late Friday ruled a key US patent supporting its Exparel pain medication invalid, exposing the drugmaker to increased competition, RBC Capital Markets said Monday in a note. Exparel, by far, has been Pacira's most lucrative franchise, generating $538.1 million if...
Thomson Reuters Launches CoCounsel 2.0
Thomson Reuters Launches CoCounsel 2.0
Aug 12, 2024
12:49 PM EDT, 08/12/2024 (MT Newswires) -- Thomson Reuters ( TRI ) on Monday launched a professional-grade GenAI assistant, CoCounsel 2.0, which it says functions as an extra team member and three times faster than the first generation of CoCounsel. CoCounsel 2.0 is able to handle complex, multi-step work, by helping professionals pinpoint key knowledge in databases, communicate detailed information,...
Porsche Holding in group taking stake in Greyhound owner Flix
Porsche Holding in group taking stake in Greyhound owner Flix
Aug 12, 2024
FRANKFURT (Reuters) -Porsche Automobil Holding SE said on Monday it is part of an investor group that is taking a 35% stake in Flix SE, owner of Greyhound services in North America and FlixBus in Europe. Porsche, which controls German carmaker Volkswagen, said it was co-investing with private equity firm EQT and investor Klaus-Michael Kuehne, among others, and that its...
Stellantis in Tough Position Amid Pricing, Production Pressure From High North America Inventories, Morgan Stanley Says
Stellantis in Tough Position Amid Pricing, Production Pressure From High North America Inventories, Morgan Stanley Says
Aug 12, 2024
12:47 PM EDT, 08/12/2024 (MT Newswires) -- Stellantis ( STLA ) is facing a difficult situation amid potentially weaker H2 volumes, as well as pricing and production pressure from high North America inventories, following a disappointing H1, Morgan Stanley said in a note Monday. As a result, the investment firm said it now expects a full-year 2024 adjusted operating income...
Copyright 2023-2026 - www.financetom.com All Rights Reserved