Ford is increasing its investment in electric and autonomous vehicles to $29 billion, the company’s top executives said in an earnings call Thursday. The automaker had previously committed to spend $11.5 billion on electrifying its vehicle lineup through 2022. Now, Ford says it will spend double that amount, while extending the timeline to 2025.
The automaker will spend $7 billion on autonomous vehicles and $22 billion on electric ones. That $22 billion includes $7 billion that the company has already spent since 2016.
Ford said a majority of vehicles it plans on producing will be battery-electric vehicles, but the company also has hybrid and plug-in hybrid models that also have traditional internal combustion engines. The company introduced an all-electric Transit van last year, and plans on unveiling an electric version of its best-selling F-150 pickup truck later this year.
Ford’s new CEO Jim Farley touted the company’s increased investment as a “more aggressive” plan to position the nation’s oldest automaker as a leader in the future of mobility and transportation. Farley cited Ford’s recent announcement that it would work with Google to integrate the tech giant’s Android software into “millions” of vehicles starting in 2023 as representative of the type of deals involved in Ford’s pivot to a more digital future.
The increased investment is meant to convince those on Wall Street who have been jittery about Ford’s ability to catch up to Tesla, which has been the only automaker to successfully build an EV business over the last few years. Ford is keeping pace with other legacy automakers like GM and Volkswagen, having just begun delivering its hotly anticipated Mustang Mach-E to customers late last year — though a quality review issue delayed hundreds of additional deliveries last month.
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 (Daimler itself is soon to be renamed Mercedes-Benz), said it will produce electrified versions of all of its cars by 2022. Volvo announced it would start to phase out gas-only car production in 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.
Ford isn’t even the only car maker to greatly increase its bet on electric. Late last year, GM said it would spend $27 billion on electric and autonomous vehicles through 2025 — up from the $20 billion it announced before the COVID-19 pandemic.