The U.S. also plans to relax its plans to ease vehicle emissions and electric vehicle sales until 2030, following the UK's postponement of a ban on the sale of new petrol and diesel cars from 2030 to 2035, and the EU's agreement with Germany to allow new gasoline vehicles to reach cars by 2035.
Recently, according to overseas ** reports, the U.S. Environmental Protection Agency proposed in April last year to stipulate a 56% reduction in new car emissions in 2032, according to the authorities' original proposal from 2027 to 2032, the proportion of electric vehicle sales by automakers in 2030 and 2032 needs to reach 60% and 67% to meet stricter emission regulations. But now, the U.S. plans to slow down its 2030 emissions target for car sales, and electric vehicles can meet the rules if the proportion of electric vehicles sold is less than 60%.
It is reported that this move is to leave more time for car companies to transform. However, many multinational car companies have also followed the change in rhythm and slowed down the pace of electrification transformation in order to take advantage of this gap to maximize benefits.
Electrification is still a drag
Ford is one of them.
According to the previous plan, from 2022 to 2026, Ford will invest more than $50 billion globally in the development and manufacture of electric vehicles and battery-related products. By the end of 2026, Ford plans to produce more than 2 million electric vehicles, and by 2030, electric vehicles are expected to account for half of its global sales.
However, as EV sales slow, Ford also plans to cut $12 billion in EV spending and ramp up production of traditional internal combustion engine models. According to Ford executives, Ford's electric vehicle focus in 2024 will be placed on the sales of hybrid vehicles, especially trucks, and its hybrid sales are expected to increase by 40% this year.
The slowdown in the electric vehicle business is due to the fact that Ford's aggressive electric vehicle division is still a drag on the overall business. Ford's 2023 financial report data shows that its electric vehicle business is underperforming financially, with a loss of up to $1.5 billion in the fourth quarter of last year, and an EBIT margin of -982%, a full-year loss of $4.7 billion, higher than the previous forecast of a $4.5 billion loss.
To this end, Ford also plans to make up for the loss of electric vehicles by increasing the profitability of the Ford Pro fleet business and the traditional Ford Blue internal combustion engine business. It is reported that Ford Pro is expected to generate an EBIT profit of 8 billion to 9 billion US dollars, while the EBIT loss of the electric vehicle division will reach 5 billion to 5.5 billion US dollars, which is enough to offset the huge investment in intelligent electrification transformation.
Now, Ford is also taking action, with production of the F-150 Lightning electric pickup truck halved and production of high-margin models such as the Bronco sport utility vehicle and Ranger pickup truck further ramped up.
Will the process be lengthened?
In fact, Ford's revenue last year reached $176.2 billion, up 11% year-on-year, and its net profit reached 43300 million US dollars, successfully achieved a turnaround. The overall financial data is good, thanks to the strong sales of gasoline vehicles and high-margin models. It is understood that Ford's sales in the United States reached 199 last year590,000 units, a year-on-year increase of 71%。
Not only Ford, but also Toyota, Honda, Hyundai, GM and other multinational automakers that seem to be lagging behind in electrification are also showing strong growth in performance.
Specifically, in 2023, GM will achieve revenue of $171.8 billion, a record high, a year-on-year increase of 96%, net profit reached 10.1 billion US dollars, a year-on-year increase of 194%；Toyota achieved sales revenue of 12 in the third quarter of fiscal 2024 (October-December 2023).04 trillion yen, a year-on-year increase of 234%；Net profit 136 trillion yen, an increase of 86 percent year-on-year5%；Honda's revenue for the third quarter of fiscal 2024 increased by 21% to 539 trillion yen, net profit of 253.3 billion yen, a year-on-year increase of 354%。
On the other hand, Tesla's performance last year was lower than expected. In the fourth quarter of 2023, Tesla's revenue was 251$700 million, up 3% year-on-year, below market expectations of 258$700 million; Gross margin slipped to 17 in the fourth quarter6% versus the consensus of 183%, the lowest since 2019.
The sharp contrast between the popularity of fuel vehicles and the cold of electric vehicles reflects the real demand of overseas markets. Some industry insiders said that more time was needed abroad to establish a nationwide network of charging stations and reduce the cost of electric vehicles. At the same time, due to various factors, the policies of Europe, the United States, Japan and South Korea may change in 2024, especially when the economy weakens and there are systematic layoffs. This year's UAW requirements cannot be met in the era of electrification. Therefore, this year is likely to see Europe, the United States, Japan and South Korea stretch the entire electrification process and then use "carbon-neutral fuel alternatives" to continue their lives.
In this process, traditional car companies have more time to adjust, while domestic car companies need to take this opportunity to accelerate their development, bring more products with essential differences to consumers, further enhance market competitiveness, and get out of the vicious competition of infinite involution.