Ford Motor Company said Sunday that it would more than double its investment in the production of electric vehicles, promising to spend $11 billion on the technology by 2022. The auto giant will roll out 16 fully electric cars within five years, the first of which would arrive in 2020.
It was a dramatic escalation in Ford’s crosstown rivalry with General Motors, which has seen its stock prices rise thanks to its commitments to both electrification and autonomy. GM has said it plans to roll out at least 20 new electric cars by 2023, a goal that puts it in a position to bring battery-powered driving to the mainstream. Last week, it unveiled a concept autonomous car without steering wheel or pedals.
Meanwhile, the Blue Oval has had a challenging 2017. It remains strongly profitable, but its sales are stagnant, its costs have increased faster than expected, and its margins have failed to meet targets. In May 2017, Mark Fields was replaced by Jim Hackett as CEO amid a larger management shuffle.
Most of the big automakers have said in the past year that they plan on pivoting to all-electric lineups. Daimler AG, the parent company of Mercedes-Benz, said it will produce electrified versions of all of its cars by 2022. Volvo announced it would phase out gas-only car production by 2019, while the Volkswagen Group is going to make everything electric in some shape or form by 2030. And China’s rising prominence in the auto market, in addition to that country’s restrictions on manufacturing fossil-fuel burning vehicles, is certainly putting pressure on the entire industry to go electric.
Amid that backdrop, Ford’s executives took to the stage at the North American International Auto Show in Detroit Sunday to announce they would be doubling down on electrification. (Last week, the company made several big announcements on autonomous and connected cars.) They also revealed the 2019 Ranger, Edge ST, and Mustang Bullitt — all proud gas-guzzlers. So feel free to take these promises of more battery-powered cars with a grain of salt.
It’s certainly a significant increase in investment. In late 2015, Ford said it would spend $4.5 billion on its electrification program, which would translate into 13 electric cars on the road by 2020. Now, not only is the automaker doubling that promise, but it also said it would produce an all-electric sports car dubbed the “Mach 1.” Sunday’s announcement comes three months after Ford set up a group of employees, dubbed Team Edison, to study vehicle electrification.
Basing these vehicles on nameplates that customers know, like Mustang, can help the company sell these vehicles, even as electric cars still only account for a fraction of annual sales, said Ford Executive Chairman Bill Ford.