Experts Not Sure BEVs Can Stop Ford Europe’s Tailspin

HAMBURG, Germany – Ford Europe’s Feb. 14 announcement that it will axe 3,800 jobs in the region over the next three years is designed to ensure the U.S. automaker’s European arm survives as a more focused battery-electric-vehicle (BEV) brand, but some experts question whether Ford can prevent this key operation from downsizing further in the future. 

Ford Europe manufactures in Cologne, Germany; Valencia, Spain; and Dagenham in the U.K.; has a research facility in Dunton and a transmission plant in Halewood, both in the U.K.; and an assembly joint venture with Turkey-based Koç Holding in Craiova, Romania, and Kocaeli, Turkey.

It says the job cuts were designed to help sales in a highly competitive region facing significant economic and geopolitical headwinds. In a note, the company stresses its strategy to offer an all-electric fleet in Europe by 2035 remains unchanged, with production of Ford’s first European-built passenger BEV scheduled to start later this year.

In June 2022, Ford announced Valencia will become a key BEV production location: “Pending product approval, the Valencia plant could produce breakthrough electric and connected vehicles beginning later this decade.”  

Ford Europe also cited the transition to fully electric powertrains reducing vehicle complexity, and hence the need for fewer staff, in announcing the European engineering footprint will be reduced by 2,800 jobs, 1,700 and 1,000 of which are in Germany and the U.K., respectively. This is part of an overall roster reduction of 2,300 and 1,300 employees in those respective locations. 

“We are completely reinventing the Ford brand in Europe. ‘Unapologetically American’ outstanding design and connected services…will differentiate Ford and delight our customers in Europe,” says Martin Sander (pictured, below left), general manager of Ford Model e Europe, the automaker’s electrified-vehicle spin-off in the region.  

Martin Sander - Ford Europe

BEVs such as the Mustang Mach-E CUV “are indicators of this (strategy) and have already been well received in the market,” the spokesman says. 

The switch to BEVs would mean “paving the way to a sustainably profitable future for Ford in Europe,” Sander says, adding this “requires broad-based actions and changes in the way we develop, build and sell Ford vehicles.” 

Ford Europe already has made a series of detailed announcements about its move to BEVs. In March 2022 it announced a $2 billion investment in the Cologne site, where the first BEVs in Europe will roll off the production line later this year. Almost simultaneously, production will end in Cologne for the Fiesta small car (pictured, below), as well as for the S-Max and the Galaxy vans, both built in Valencia. Production of the Mondeo fullsize car ended in Valencia in April 2022.  

This change in strategy is clearly needed. Ford Europe results show a series of losses since 2017, although in 2022, Ford Europe’s full-year EBIT (earnings before interest and taxes) was slightly above break-even thanks to its strong commercial-vehicles brand.

“We have seen Ford’s passenger-car market share in Europe nearly halving from about 8% in 2011 to currently 4.6%, as Ford has gradually let itself be pushed into the low-price segment and therefore could not bring enough of its relatively good innovative power into its European cars,” Stefan Bratzel, director of the Center of Automotive Management at the University of Applied Sciences in Bergisch Gladbach, Germany, tells Wards. 

Ford Fiesta (UK) 16

Bratzel adds, “Their second strategic mistake was that they have completely overslept the transition to EVs, as reflected by their first European-built EV being based on (Volkswagen’s) MEB platform, which means both value-added and competitive product differentiation will be very low.” 

Earlier this month, German auto media speculated that Ford has ordered 1.2 million MEBs from VW to feed production for six years. The Ford spokesperson says the automaker will develop two vehicles off this platform. The first of these will be revealed March 21 and go on sale before year-end. The second will come in 2024.

“Both vehicles will be completely redesigned inside and out to ensure they are unique to Ford and represent its new brand direction in Europe,” the spokesperson says, declining to confirm how many MEBs it will be sourcing from VW.  

Will this deliver more Ford sales in Europe? Observers, including Bratzel, say that despite Ford’s claims to the contrary, the Mustang Mach-E, which is built in Mexico and China, has not been selling particularly well in Europe. There were 21,646 sales across the continent in the first 11 months of 2022, according to CarSalesBase.

Ferdinand Dudenhoeffer, a professor at the Center for Automotive Research at the University of Duisburg-Essen in Germany, for his part, doubts that a shift in model-development capacity from Europe to the U.S. under the “Unapologetically American” slogan will improve European receptiveness for Ford vehicles.  

“Designing cars in the U.S. that sell well in the European market might work for Tesla, but Ford is too weak to compete with VW and Stellantis (a legacy Detroit automaker whose headquarters is now in Amsterdam), with the ongoing entry of several strong Chinese EV brands boding ill additionally,” Dudenhoeffer says. 

Indeed, he suggests Ford has too little money to aggressively compete with VW, Stellantis and the Chinese (BYD, Geely, etc.) in the development of BEV tech. “It will struggle to catch up,” he says. 

In the longer term, Dudenhoeffer predicts: “It is very likely that Ford will give up European-based passenger car production to ultimately become a pure importer.” 

Time will tell if those gloomy forecasts happen, or Ford seizes the BEV initiative and prospers in Europe.