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Ford Urges EV Suppliers To Cut Costs Wherever Possible

Many automakers have realized that EV demand is cooling off in favor of hybrids and plug-in hybrids. That is exactly the reason why General Motors, Ford Motor Company, and Stellantis are pivoting toward HEVs and PHEVs to the detriment of EVs, which is arguably the best course of action.

Be that as it may, no automaker is abandoning battery-electric vehicles. Ford is trying to weather the drop in demand by means of a call to action for its EV suppliers. Obtained by Automotive News affiliate Crain’s Detroit Business, the memo urges EV suppliers to reduce costs wherever possible.Ford chief supply chain officer Liz Door said the following: “To enable affordability, it is of paramount importance that our EV portfolio achieves further levels of material cost efficiency.” Read that again, take a minute to understand what material cost efficiency means in this context, and imagine what’s going to happen to the F-150 Lighting and Mustang Mach-E in the near future.

As if Ford Motor Company didn’t have a plethora of quality-related issues on its table, forcing suppliers to save a few cents here and there will only compound the automaker’s quality issues. Chief executive officer Jim Farley said that quality is job number one in May 2023, but one year later, it appears that he isn’t willing to keep the aforementioned promise.

Speaking of which, care to guess which of the Big Three in Detroit ended 2023 with the most recalls? The answer is Ford Motor Company, which racked up 58 recalls in the United States last year, totaling 6.1 million vehicles. Japanese automaker Honda is listed by the NHTSA as having 19 safety recalls for the 12-month period, totaling 6,334,8825 vehicles.

Ford F\-150 Lightning production at the Rouge Electric Vehicle Center

Photo: Ford

 

In addition to slowing demand, the Ford Motor Company is trying to lower EV production costs because of increasingly competitive alternatives from Chinese automakers. We also have to remember that Ford’s Model 3 division is bleeding money like there’s no tomorrow. Model e lost $4.7 billion last year, whereas the outlook for 2024 is a loss of more than $5 billion. Big ouch, indeed!

In the first quarter of 2024, the Model e division had lost in the ballpark of $100,000 for every vehicle sold. Extremely alarming, but looking at the bigger picture, Ford’s current EVs aren’t good enough. The Mustang Mach-E is a completely different animal from the two-door coupe and convertible, a compact-sized crossover underpinned by a platform derived from the C2 of the Escape. Made in Mexico rather than the United States of America, the Mustang-styled EV starts at $39,995 for MY24.

Not exactly affordable, not good in terms of range, clunky infotainment software, somewhat questionable interior materials here and there, relatively slow charging, and no heat pump are only a few of the reasons why the Mustang Mach-E shouldn’t be considered over a Tesla Model Y.

As for the F-150 Lightning, which features independent rear suspension (semi-trailing arm with coil-over springs and a stabilizer bar), can you imagine spending $62,995 on an XLT? The fossil-fuel XLT, by comparison, starts at $47,620 for MY24. No wonder the Rouge assembly plant where the Lightning is made had its three shifts reduced to one on April 1st…

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