© Reuters. FILE PHOTO: The Ford logo is pictured at the 2019 Frankfurt Motor Show (IAA) in Frankfurt, Germany. REUTERS/Wolfgang Rattay/File Photo
By Ben Klayman
DETROIT (Reuters) – Ford Motor (NYSE:) 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 up 6.5% to a near 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 electrification, including battery development, by 2030, up from its prior target of $22 billion. It has launched the all-electric Mustang Mach-E crossover, and plans to introduce electric versions of the Transit van and F-150 pickup.
“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 in a statement.
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 (NYSE:) has targeted annual sales of more than 1 million EVs in the United States and China by 2025.
GM has said it aspires to halt U.S. sales of gasoline-powered passenger vehicles by 2035, and last year said it was investing $27 billion in electric and autonomous vehicles over the next five years.
Some analysts see Ford as trailing its rivals in the electrification race, but Ford officials disagree with that view, pointing to the Mach-E rollout and its other plans.
Ahead of an investor meeting, 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, a segment Farley sees as a huge growth opportunity for the company.
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 by 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 (NASDAQ:) Inc serves that way next year and scale that to 33 million by 2028.
It 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, the other for cars and smaller SUVs. Reuters reported that on Tuesday.
Sources previously told Reuters Ford is planning to launch at least nine all-electric cars and car-based SUVs and at least three electric trucks, vans and larger SUVs, including second-generation editions of the Ford F-150 Lightning and Mach-E at mid-decade. (This story refiles to fix word order in headline)