New York — Ford will drastically overhaul its business in Europe, where it did not sell a single fully electric vehicle (EV) in 2020, vowing to go almost entirely electric by the end of the decade.

One of the first steps in the transformation announced on  Wednesday will be to plough $1bn into a German assembly plant that will start making an all-electric model in two years. By mid-2026, all passenger cars Ford sells will be plug-in hybrids or fully electric.

By 2030, Ford’s passenger-vehicle range will be completely all-electric, one of the more demanding road maps among Europe’s major incumbent carmakers. Only its smaller but strategically important commercial-vehicle business will sell some vans and trucks that lack a plug by then.

“Consumers increasingly want us to go electric,” Ford Europe president Stuart Rowley said. “Our customers are very focused on sustainability and they want the brands and companies they work with to go on this journey with them.”

As ambitious as Ford’s plan is, it has less to lose in Europe after having substantially scaled back in the region. The company has taken more than $1bn of structural costs out of its local operations the past two years, closing five factories, selling another and eliminating more than 10,000 jobs. It fell behind Toyota Motor and Fiat Chrysler to rank ninth in sales in 2020, according to the European Automobile Manufacturers’ Association.

CEO Jim Farley is trying to turn the page on his predecessor Jim Hackett’s tenure that was focused on restructuring by putting Ford more on the offensive. Farley announced plans to almost double the carmaker’s EV budget to $22bn through to the middle of this decade just after General Motors said it aims to sell only zero-emission models by 2035.

Cologne plans

Ford’s investment in Cologne, Germany, will modernise its 90-year-old plant, one of the largest manufacturing complexes in Europe. The carmaker will share more details in the coming months on its plans for the facility, which makes the small Ford Fiesta cars. It will continue production of that model in parallel with a new EV for some time before eventually going all-electric.

Europe became the epicentre of EV adoption in 2020, with carmakers selling more fully electric and plug-in hybrid vehicles there than in China for the first time. The surge was driven by stricter emissions standards, subsidies that helped the industry recover from pandemic-related disruptions, and introductions of new models to meet even more stringent rules in the coming years.

Ford needed help complying with Europe’s CO2 limits last year because of fire issues with the plug-in hybrid version of its Kuga SUV. It reached a deal in October to pool its fleet with Volvo Cars.

A partnership with Volkswagen (VW) will help Ford electrify its fleet. The companies announced in 2019 that they would expand an alliance formed in 2018 to also include joint work on EVs and self-driving technology. Ford said then it would build at least one mass-market battery car in Europe starting in 2023 based on VW’s modular platform, known as MEB.

Sharing costs will be key to Ford keeping its earnings momentum going in the region, where the company came close to its long-term target for a 6% profit margin in the fourth quarter. Ford Europe’s $414m of earnings before interest and taxes was the company’s best quarterly showing in more than four years.



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