Ford slated to spend more on EVs than on internal combustion engine vehicles in 2023
For the first time in its 118-year history, Ford Motor Co. plans to spend more on electrified vehicles than it does on internal combustion engine vehicles starting in 2023, an executive said Monday.
Speaking at an event hosted by the bank Barclays, the Blue Oval's chief operating officer for North America, Lisa Drake, mentioned the 2023 timeline while discussing the automaker's investments in electric vehicles. Earlier this year, Ford said it was increasing its investments in electrification to $30 billion through 2025.
"In 2023 ... we'll spend more on EVs than we will on ICE," Drake said. "We've been over the moon about the success of Mach-E, and the F-150 Lightning, by bringing in over 70% new customers to the Ford brand. What that allows us to do is, now we have an opportunity not only to lead on our ICE business, but also in the EV space with F-150. So our aspirations are high."
The Dearborn automaker is in the midst of fielding its first wave of electric vehicles. It launched its first all-electric vehicle, the Mustang Mach-E SUV, late last year. It will launch an electric version of its popular Transit van later this year. And next year, it is slated to launch a battery-electric version of the F-150 pickup truck, Ford's cash cow and long the best-selling vehicle in the U.S.
Those offerings are reflective of Ford's strategy of electrifying its most popular and iconic nameplates — a strategy that has had some early success in terms of Mach-E sales and reviews, and reservations for forthcoming EVs.
"The demand for our first round of high-volume EVs clearly has exceeded our most optimistic projections," Ford CEO Jim Farley told Wall Street analysts last week. He reported that F-150 Lightning has drawn more than 120,000 non-binding reservations, with approximately 75% of those potential customers coming from other auto brands.
Leaning heavily into electrification is a key component of the company's newly-announced Ford+ growth plan, which also includes an emphasis on digital connectivity and commercial vehicles.
Meanwhile, crosstown rival General Motors Co. said earlier this year that 2021 marked the first in which it was spending more on the development of electric and autonomous vehicles than on gasoline- and diesel-powered products.
In June, GM announced it would increase its investments in electric and autonomous vehicles by 30% through 2025 to $35 billion. The Detroit automaker announced earlier this year that it aims to have a zero-emissions lineup by 2035. It plans to introduce 30 EVs globally by 2025.
Ford has said it expects to electrify 40% of its global lineup by 2030. These investments and commitments come as the White House negotiates with the Detroit automakers and the United Auto Workers on emissions policies and EV sales targets the administration could announce sometime this week, The Detroit News reported last week.
The Biden administration is aiming to get the companies and the union on board with a commitment to 40% to 50% of sales being electrified by 2030. The administration also is slated to announce updated emissions and mileage standards, policies that will have major implications for investment decisions by automakers.
Speaking with a Barclays analyst Monday, Drake stressed the importance of federal policy in shaping the automaker's EV ambitions, as consumer adoption of EVs in the U.S. remains low.
"We're going to rely a lot on some of the infrastructure policies and the administration's aspiration to make this a bit more ubiquitous. We can't do it alone," she said. "We're very excited to see some of the bipartisan work that's happening in Washington right now, because it's going to be necessary to help us."