Ford is poised to cut its dependence on Volkswagen technology for its next generation of electric cars in Europe, unravelling a core part of the alliance formed between the rival carmakers two years ago.
The US brand is preparing to launch two vehicles this year and in 2024 that use VW’s electric “MEB” system, which includes assembling VW-sourced batteries at Ford’s plant in Cologne, Germany.
But from the middle of the decade Ford expects to launch vehicles that use its own in-house system, which is being engineered by Ford in the US, said Martin Sander, the head of electric vehicles in Europe.
The new system had “no kind of integration [with VW], it is very versatile, very capable”, he said. “We are exploring all kinds of opportunities, how far can we go, what kind of segments can we cover with this.”
He said a “final decision” was not taken on the future of its collaboration with VW on electric cars, saying Ford is “open” to building future vehicles on other systems, whether by VW or “another company”.
The two global carmakers formed an alliance in 2020 in order to join forces on electric cars, self-driving technology and commercial vehicles, one of several partnerships across the industry as auto groups team up in the face of rising development bills.
VW and Ford recently stopped joint work on driverless cars, after the closure of the Argo AI business, though the pair still work closely together on commercial vehicles for Europe.
The US group will still build VW’s next delivery van, as well as its next pick-up truck, and a future electric van.
Ford has been reshaping its business in Europe and positioning the brand to sell fewer types of vehicles. It hopes they will be more distinctive as the market becomes saturated with increasingly indistinguishable electric vehicles.
It recently announced the phaseout of the Fiesta, a historic small car that was the best selling model in the UK for several years, but has no plans to replace it with a battery version for the foreseeable future.
“We are not looking at entry-level vehicles at the moment,” said Sander, although it is something that the company is open to in future if battery costs fall sufficiently.
He said it depends on “the overall feasibility of making an entry level vehicle work financially”, adding: “We know we have a big customer base.”
In 2021, Ford carved its company into three units — electric vehicles, engine models and commercial vehicle services — to help its teams work in a more focused way as it shifts towards an era selling only electric vehicles.
Sander said Ford expected to make a profit in the European wing of its electric car unit in 2025, which is in line with industry estimates that high costs and relatively low sales will hamper profitability in the short term.
The company would also pass through the rising costs of batteries into its models, he added.
The group may also withdraw petrol or hybrid models from sale before its 2030 deadline for ending engine sales, if demand has shifted to electric models faster than expected.
“We keep them running as long as our customers want them,” he said. “If we see in 2028 that there is no demand for [internal combustion engine] products, then maybe we make a call. But at the moment our plan is to keep Puma and Kuga [its two engine-based models] running until 2029, 2030.”
The EU plans to phase out new petrol and diesel sales by 2035 under plans that some carmakers want delayed.
Sander said a 2035 cut-off for passenger cars was a “very theoretical conversation because I can’t believe that there would be a big number of consumers asking for [internal combustion engine] products in 2035”.
The European Commission is also considering tightened rules on engine emissions from 2025, which some carmakers have said would force them to divert spending from electric cars into older models to keep them compliant.
Sander said the new rules would be “dramatic for the whole industry” if introduced in 2025, rather than later on in the decade, and would make it likely that Ford ended some vehicle production early.
Bringing in the new rules, which are not yet finalised, in 2025 would force Ford to make decisions “soon” including fewer engine variants, and “most likely that one of the other [internal combustion engine] products will be discontinued earlier”, he added.
