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The birth and death of the Ford Fiesta was bookended by global energy crises.
The car was launched in 1976, when the world urgently needed more energy-efficient vehicles after gas prices rose following the OPEC oil embargo. This week Ford announced that it will end European production of its classic Ford Fiesta sedan in 2023 in favor of electric vehicle production in Europe, now in a severe energy crisis as Russia and Europe cut oil and gas ties.
This is another sign of electrification of the European car market, said Tim Urquhart, a European principal automotive analyst at S&P Global Mobility. “It certainly reinforces their commitment to electrification and refocusing their assets,” he said.
The move marks the 119-year-old company’s latest attempt to transform itself into an electric vehicle (EV) company. Ford entered the era of EV. Impatient with the pace of change, investors pushed the company’s new chief executive, Jim Farley, to redouble his efforts to release a full line of EVs representing 2 million electric cars each year, about one-third of global production. (Ford today expected to account for about half of its sales be all-electric by 2030).
Ford has already announced it will stop selling nearly all cars in North America to focus on more profitable SUVs and crossovers in 2018, and then began a $50 billion push to develop electric vehicles that are starting to catch on. the market. Ford doesn’t expect its EV business, which it calls the “Ford Model e” (separate from the company’s internal-combustion engine unit Ford Blue), to profitable until 2025.
The rough road ahead
Automakers are making tough choices amid shortages of chips and auto parts, as well as unprecedented demand for EVs. To boost profits, Ford and others are dumping cheaper cars favour of high-priced luxury models and pouring money into innovation.
The death of the Fiesta is a step in these plans. Once the best selling car in Europe, the Ford Fiesta will end of production in the EU a year earlier than planned amid declining sales (Ford stopped making cars in the US in 2018). By 2030, Ford wants all of its passenger cars in Europe to be fully electric. The company already has seven EVs in production for Europe, and is converting a plant in Cologne, Germany, to produce 200,000 EVs a year by 2023 before making batteries in 2024.
This will likely boost Ford’s EV plans for the US where tax credits in the Inflation Reduction Act promise to fuel demand and offset the price tag for new production facilities. “Anything that makes it easier to sell electric cars in the US should make it easier to sell electric cars around the world,” Brauer said. “The US is probably one of the least electric car-friendly countries.”
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