DETROIT (Reuters) – Ford Motor Co on Wednesday outlined plans to boost spending on its electrification efforts by more than a third and said it aims to have 40% of its global volume be all electric by 2030, sending shares near a five-year high.
Under a plan dubbed “Ford+” meant to have investors value it more like a technology company, the No. 2 U.S. automaker said it now expects to spend more than $30 billion on EVs, including battery development, by 2030, up from its prior target of $22 billion. Ford’s shares were up 7.4% in afternoon trading after earlier rising almost 9%.
“This is our biggest opportunity for growth and value creation since Henry Ford started to scale the Model T,” Ford Chief Executive Jim Farley said at the company’s Capital Markets Day meeting online. “Our ambition is to lead the electric revolution.”
Ford and other global automakers are racing to shift their gasoline-powered lineups to all electric power under pressure from regions like Europe and China to cut vehicle emissions. U.S. President Joe Biden has called for $174 billion to boost U.S. EV production, sales and infrastructure.
Ford’s 2030 sales target would translate to more than 1.5 million EVs, based on last year’s sales. By comparison, rival General Motors Co has targeted annual sales of more than 1 million EVs in the United States and China by 2025. Ford previously said its European lineup will be all-electric by 2030.
GM aspires to halt U.S. sales of gasoline-powered passenger vehicles by 2035, and has said it was investing $27 billion in electric and autonomous vehicles over the next five years.
Some analysts see Ford as trailing rivals in the electrification race, but Ford officials disagree, pointing to the rollout of the Mustang Mach-E electric crossover, and the electric versions of the Transit van and F-150 pickup.
Ford said it expects to deliver an 8% operating margin in 2023.
The Dearborn, Michigan-based company also said it is forming a new stand-alone unit, called Ford Pro, to focus exclusively on commercial and government customers.
The company is targeting increasing revenue for the commercial market for hardware and related services addressable by Ford Pro to $45 billion by 2025, up from $27 billion in 2019.
Ford said it will also aim to develop EV batteries under the “IonBoost” brand, from lithium-ion versions to lithium-ion phosphate for commercial vehicles and eventually low-cost solid-state batteries in partnership with startup Solid Power, in which the automaker has invested. Farley expects Ford to cut battery costs 40% by mid-decade.
Last week, the automaker announced a memorandum of understanding to form a battery joint venture with South Korea’s SK Innovation, to make battery cells at two U.S. plants.
Farley also said Ford expects to have 1 million vehicles capable of receiving over-the-air software updates on the road by the end of the year, top the number of vehicles Tesla Inc serves that way next year and scale that to 33 million by 2028.
Ford also announced “Blue Oval Intelligence,” an in-vehicle technology stack that allows fully connected and updated software, enabling the automaker to interact with customers after the vehicle sale. The stack also will enable streaming services from Apple, Amazon, Google and Baidu.
Ford sees the overall market for connected functions like driver-assist technologies, new features and upgraded software content, and EV charging hitting a projected $20 billion by 2030.
Ford confirmed it will develop two dedicated EV platforms, one for full-size trucks and SUVs, including the Ford Explorer; the other for cars and smaller SUVs. Reuters reported that on Tuesday.
(Reporting by Ben Klayman; Editing by Steve Orlofsky)