Ford Urges Suppliers to Cut Down EV Costs Amid Financial Challenges

After Ford reportingly a loss of $100,000 per electric vehicle (EV), the company issued a “call to action” to its suppliers urging them to drive down costs in EV production in a new memo. 

The “call to action”, outlined in a recent memo obtained by Crain’s Detroit Business, emphasizes Ford’s decision to address financial setbacks and improve its competitiveness regarding its EV portfolio according to Automotive News. As Ford projected losses of $5.5 billion for its Model e unit this year, the automaker is strengthening efforts to alleviate financial strain and achieve better cost efficiency in EV production.

Liz Door, Ford’s chief supply chain officer, expressed the need to navigate the company’s challenges while optimizing affordability in the memo stating, “To enable affordability, it is of paramount importance that our EV portfolio achieves further levels of material cost efficiency.”

“We need your best ideas to drive cost reduction, even if they have been previously rejected by Ford,” Door expressed in the memo. “We also would be willing to consider ideas that may require investment but support profitability. Everything is on the table.”

Interestingly, the memo also further requests suppliers to devise “incremental cost-reduction proposals” for Ford’s current and upcoming EVs, which include EV models such as the F-150 Lightning pickup, next-gen P800 electric pickup, Mustang Mach-E, E-Transit van, and Ford’s large electric SUV. Through this request, it is encouraging its suppliers to present ideas that focus on improving affordability while streamlining production operations.  

With Ford’s “call to action” being the company’s current motive, its goal of electrification is still on the horizon as their competition with Tesla takes the crown in the U.S. EV market. Furthermore, despite Ford reporting losses, it has reached certain bright sides as the company managing to reach a 129.2% increase year-over-year in EV sales for April 2024 compared to the same period last year with the Mustang Mach-E reaching a 204.7% growth.

As Ford steers through its challenges of cutting costs for EV production, the outcome relies on collaboration with suppliers as the pivotal drive to fortify the company’s position in the competitive EV market. With Ford still looking to electrify its lineup, the company’s success will depend on its proactive engagement with its supply chain. 

If you are looking for Ford models, we can help you get started. Click Here to find the best deals near you. Want to learn more about EV? Thinking of buying an EV? Head over to EV.com and discover more.