Ford Invests Big To Produce Small Electric Cars In China

2015 Ford Focus Electric

NOV 30 2017 BY MARK KANE 16

The joint venture that Ford Motor Co. intends to launch with Anhui Zotye Automobile Co. to produce electric vehicles in China (for the Chinese market) is now moving forward.

Ford

Through an investment of 5 billion yuan ($756 million), Ford and Zotye will build a new manufacturing facility in Zhejiang province.

Under a new brand, the partners will sell small electric cars that hopefully will enable Ford to satisfy its government requirements for New Energy Vehicle share (which means 10% of all sales have to be offset with zero emission credits in 2019).

Ford envisions that 70% of all its car sales in China are to be electrified (which means at least conventional hybrids) by 2025.  Whether or not that is good enough to satisfy a tightening Chinese mandate for plug-in vehicles remains to be seen.

At the same time Ford expects that New Energy Vehicle (AKA plug-ins) sales will reach 6 million by 2025 (including 4 million BEVs).

source: Automotive News

Categories: China, Ford

Tags:

Leave a Reply

16 Comments on "Ford Invests Big To Produce Small Electric Cars In China"

newest oldest most voted

Too bad for Ford being put in a position of having to enter in this type of agreement to continue selling their ICE cars in China but Ford brought it on themselves for being EV laggards.

EV wise Ford is in a poor position which they will find hard to recover from anytime soon… the Chinese know this and are taking full advantage of Ford accordingly.

Didn’t Tesla find a way to get around this?

Kinda but not really…
They just chose a different stick…
Tesla is reportedly going to setup a plant in a China free trade zone but will still have to pay a 25% impprt tax just like if it was made in another country…

Every foreign to China automaker has to follow the same rules and is in the same position…
Ford did not bring it on themselves as it was Clinton and the US Congress who signed off on the free trade agreement with China that brought it upon them along with the economic cowardice off all the Presidents and Congressmen who followed…

Yogurt said: “Every foreign to China automaker has to follow the same rules and is in the same position…‘
—————

If Ford had an EV that was production ready for the Chinese market Fore would only then need a local Chinese sponsor partner for the Ford Chinese production facility or alternatively attempt to do what Tesla did not requiring a local partner…

But since Ford has no EV product to sell into the Chinese market (China compliance wise) the Chinese are having Fore bend over and accept an agreement with Zotye which basically is an agreement for Ford to provide a Chinese competitor car maker $ to develop and manufacture an EV that will compete with Ford.

There is [for now] no trade involved, so the FTA rules don’t apply, I surmise.

However, I agree that the Chinese have been very smart in leveraging first the promise, and now the size of their gigantic home market.

Only in conjunction with Europe and Japan could these somewhat predatory rules be effectively altered, but there’s zero chance of constructive engagement with our erstwhile partners now.

Wow! Do you ignore history to spew falsehoods? Why are Japanese building cars in US? All due to our gov. imposing demands. If Ford follows Chinese similar demands, whyvare you opposed? Hate is blinding!

> EV wise Ford is in a poor position which they will find hard to recover from anytime soon…

Sure. But it’s not important, in terms of the bottom line, to recover anytime soon. EVs are one percent of the market, and an unprofitable one percent at that.

It doesn’t necessarily take that long to get some EVs in place when this changes, they become profitable and a bigger share of the market.

Witness how quickly GM brought the Bolt to reality, largely by outsourcing the work to LG. Ford certainly can do the same. But it wouldn’t improve their bottom line – yet.

I believe they are waiting. Given the pace of technological development a car designed today is likely outdated in two years. Given the small volume, two years is too little to pay for designing, testing, homologating and producing the car.

My prediction is that Ford will take action in 2020 and launch EVs for USA and Europe by 2022. I’m excluding then the sort of cheap conversion job that is the FFE. 🙂

Ford brought this on themselves for trying to protect their ICE investments by restricting upgrades to their own retrofit PHEV and EV model for 5 years, when the competition are on their second generation of dedicated models.

Much has to do with Bill Ford and his misguided focus on ‘mobility’ thinking consumers don’t want to drive and want to give up driving for commercial autonomous vehicles. Talk about a disconnect from the consumer base. Model S outselling S-Class and 7-Series combined wasn’t enough, but it seems to have taken 500k Model 3 reservations to bring Ford back to reality. But late and still only committed to just 1 new EV by 2021. Just 1 EV and more ICE engine PHEVs.

But Ford knows that offering a 300 mile EV with a nice body, will immediately make their ICE lineup look old in every way.

Unfortunately, people generally lack the imagination required to be able to appreciate a ‘good thing’ until they have some hands-on experience of it. The same is true of driverless cars which will, once they start appearing in significant numbers, will prove Mr Ford right and you wrong!

Mr. Ford right? It’s been a few generations since we saw that.

I think this is a stupendously intelligent move for Ford. Make, sell and further develop small, utilitarian ev’s for the Chinese market, make your money back easily on scale and at the same time bring down those costs for the world market and increase the margins over the coming years. That seems pretty clever to me but then chicken with electrical outlets challenged by me with a metal butter knife. I’ve been lucky so far.

`I play chicken’ should’ve been in there – damn you Sirri.

What happened to keeping jobs here in America?

One of the few good consequences of “business” having become a subject in itself, and companies being run by people who know business, but are otherwise not knowledgeable about their own industry or products, is that “patriotism” (nationalism with lipstick) has pretty much disappeared from the equation.

Why should we prefer to help those in our own nation over others? If we should discriminate at all, why not favour those who need it most? Or those who have less opportunity through no fault of their own?

Corporations have turned into near-perfect greed machines. Heck, they even abide by the law only to the extent deemed most profitable. This is a bad thing in most respects. But one consequence is they do not favour Americans, or Chinese, or Norwegians – and that’s surely a GOOD thing!

Ford is playing this game rather defensively. Maybe it has to. Nobody’s making good money building electric cars yet. China is the only big, and therefore important, market where EVs are certain to be a necessary ingredient to make money in the near future. I don’t think Ford has any doubts about electric cars becoming important in all markets. But the technology is moving rapidly. By waiting, Ford can probably save a lot of investment, and postpone even more. The strategy isn’t without risks, of course (but no strategy is). When Ford decides to move it will need to move more decisively. Catching up technologically will be quite easy. EVs are simpler cars, and the big technological changes happen in the supply chain. Securing a sufficient supply of batteries may (or may not?) prove more difficult. Solid-state batteries and wireless charging are two examples of shifts that are likely to happen in three to five years. But EVs probably won’t matter very much to car makers’ bottom line for several years after that. I doubt Ford will be waiting much longer than 2020 to make EVs for Europe and USA. And I’ll be shocked if they wait until 2025. In… Read more »