Losing too much to sustain, Ford asked suppliers to help reduce costs
LienMay 20, 2024, 10:43 AM
Losing tens of thousands of dollars on average for every electric car sold? Such a predicament is happening to Ford. In recent years, electric vehicles have brought huge losses to Ford, just in the first quarter of this year, Ford's electric vehicle and software departments have already recorded a loss of 1.3 billion US dollars in operation, with an expected pre-tax loss of between 5 billion to 5.5 billion US dollars this year. As a result, Ford has asked suppliers to help reduce the cost of electric vehicle production.
According to foreign media reports, Ford recently released an internal memo and contacted the parts manufacturers of electric vehicle projects, asking them for suggestions to cut costs and achieve profits in the electric vehicle business. Liz Door, Ford's chief supply chain officer, said in the memo: "We've all invested a lot of money in the electric vehicle business, and we will prosper or lose together. Everything is negotiable, and we call on everyone to take action."
Liz Door asked suppliers to ensure efficient production operations and reduce capital expenditures. She also called on suppliers to develop an “incremental cost reduction plan” for a range of existing and upcoming electric vehicles. Ideas to reduce costs may include business, design, component content, footprint, and value chain. When necessary, Ford can even reduce capacity and reallocate capital as needed to address the dilemma of profitability.
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