Ford doubles investment in German electric car manufacturing

Ford has announced plans to invest €4.4 billion into its electric vehicle (EV) manufacturing programme in Germany, an attempt to revitalise its struggling European operations. The US automotive giant, which previously pledged to transition its European business to fully electric by 2030, has faced significant financial challenges. Reports indicate that its German business is currently €5 billion in debt, highlighting the urgency for change.

Speaking to the Financial Times, Ford’s vice-chairman and chief financial officer, John Lawler, acknowledged the company’s difficulties in Europe. He emphasised that Ford must chart a viable path forward, stating that the lack of sufficient demand in the EV market has contributed to the challenges. According to Mr Lawler, tackling the root causes and implementing cost reductions will be critical to achieving success in the electric vehicle sector.

Despite its legacy as a dominant player in the European car market, Ford has struggled to maintain its foothold in recent years. The company’s share of the European car sales market has dwindled to just 3.3 per cent, with a 23 per cent drop in UK sales during 2024 resulting in a record low market share of less than six per cent. This was a striking contrast to previous decades, when models like the Ford Fiesta and Focus consistently topped sales charts.

Ford’s electric vehicle models, including the Puma Gen-E, Mustang Mach-E, and Explorer crossover, have failed to mirror the success of its traditional petrol-based bestsellers. Research from the consultancy New AutoMotive revealed that EVs accounted for only 14 per cent of Ford’s total UK sales. In comparison, other major carmakers have been quicker to adapt to the growing demand for zero-emission vehicles.

Ford’s situation has prompted the firm to lobby the UK government to ease its zero-emission vehicle mandate. The current mandate, which requires manufacturers to aim for 28 per cent of car sales to be fully electric by 2025, marks a significant challenge for Ford due to its slower EV adoption. The company’s difficulties come amidst broader industry struggles to meet expectations for rapid EV expansion as manufacturers confront both technological and consumer-driven hurdles.

Though Ford ceased passenger car production in the UK more than two decades ago, it retains a limited presence with diesel van engine manufacturing in Dagenham and EV transmission components production in Halewood. However, job cuts and reduced operations in the region reflect the shifting priorities of a company attempting to redefine its role in the electrification era.