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.