Ford Authority

Ford Sends SOS To EV Suppliers For Cost Reduction Assistance

With demand for EVs falling behind expected levels of growth, Ford has responded by delaying certain models, scaling back the footprint of future plants, and cutting supplier orders as a result. This is a stark turnaround from just a year ago, when suppliers like SK On and Magna were reaping the benefits of both government incentives and soaring demand, all of which has taken a sharp turn as consumers are now dictating the pace of EV adoption. Along with Ford, suppliers are feeling the pinch, cutting jobs while maintaining a positive longterm outlook. However, with inflation showing no signs of easing and demand waning, Ford is now asking its suppliers to help in its quest to drive down costs, according to Automotive News.

Ford F-150 Lightning Rouge Electric Vehicle Center Expansion - Exterior 002 - Rear Three Quarters

Ford recently sent a memo to its EV suppliers as a “call to action” as it seeks ways to drive down the cost of producing EVs, specifically, asking for ways that the entities could partner up to make that happen. This move comes as Ford expects its all-electric Model e division to lose around $5.5 billion in 2024, even as it has scaled back its planned investments in that endeavor. As such, it’s asking suppliers to create “incremental cost-reduction proposals” for current and future products, in areas such as “commercial, design, content, footprint, and value chain.”

“We have all invested heavily in the success of the EV business, and we will all win or lose together,” Liz Door, Ford’s chief supply chain officer, said in the memo. “To enable affordability, it is of paramount importance that our EV portfolio achieves further levels of material cost efficiency.”

Ford Rouge Electric Vehicle Center F-150 Lightning Production Process - Exterior 001 - Front Three Quarters

“We need your best ideas to drive cost reduction, even if they have been previously rejected by Ford,” Door said in the memo. “We also would be willing to consider ideas that may require investment but support profitability. Everything is on the table. This includes adjusting capacity quickly downward where necessary, repurposing capital as needed, understanding spending curves, and discussing all options with Ford.”

We’ll have more on this soon, so be sure and subscribe to Ford Authority for continuous Ford news coverage.

Brett's lost track of all the Fords he's owned over the years and how much he's spent modifying them, but his current money pits include an S550 Mustang and 13th gen F-150.

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  1. John

    Why don’t they send the SOS to Blackrock, Vanguard, State Street, their buddies at the club in the WEF, the EPA, NHTSA, Congress, and the senile guy that should be in a nursing home (maybe I need to narrow this last one down a bit, seems to be more of these types running things now)?

  2. Bill

    Cost decreases with increased production and sales. Many other factors influencing sales including charging network reliability.

  3. Tigger

    Farley and Junior made this mess, let them fix it.

  4. David Dickinson II

    The Green Hole keeps sucking in and destroying every dollar that gets into its gravitational field. Basically, Ford is asking everyone to share in their losses. It was Ford’s decision, let them live with it.

  5. Shockandawe

    Use Duracell AAA batteries and kill the ugly Mach E!


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