Ford has made significant changes to its electric car strategy for the Chinese market, resulting in the integration of its subsidiary, Ford Electric Mach Technologies (FMeT), into Changan Ford, the company’s general joint venture with Changan Automobile. FMeT, which was established less than a year ago, was responsible for developing electric vehicles and distributing the Chinese version of the Ford Mustang Mach-E. However, the move to integrate FMeT is seen as a response to the electric model’s underwhelming sales performance in China.
As of 1st August 2023, Changan Ford will take over the distribution of the Mustang Mach-E electric model, expanding its sales network to nearly 300 dealers in 70 Chinese cities. This consolidation is expected to improve sales prospects for the electric SUV in the region.
Insiders suggest that the weak sales figures of the Mustang Mach-E have led Ford to reconsider its approach, as operating a separate company for electric vehicles would have been financially unsustainable in the long run. Reports indicate that only 60 units were sold in China from January to April, highlighting the challenges faced by the model in the market.
Negotiations regarding the integration of FMeT into Changan Ford have been ongoing for over a month, leading to a compromise where some of FMeT’s sales staff will transfer to Changan Ford, while others will receive compensation or have their contracts expire. Changan Ford initially declined to take on all of FMeT’s employees.
In an effort to boost sales, Ford previously reduced the prices of the Mustang Mach-E in two stages, offering significant discounts. However, the price reductions did not yield the desired results, and sales remained sluggish. As part of the realignment, Changan Ford has also announced an unusual step: it will replace and upgrade the processor for the digital cockpit in all previously delivered Mustang Mach-Es in China, free of charge. The older Qualcomm Snapdragon 820A chip will be replaced with the Snapdragon 8155, commonly used in many mainstream models in China.
See also: Ford Slashes Prices on Mustang Mach-E in China to Boost Sales in Competitive EV Market
The Mustang Mach-E for the Chinese market has been manufactured by Changan Ford at its Chongqing plant since October 2021. Ford relies on battery cells from CATL for its electric vehicles in China, while the North American and European versions of the Mustang Mach-E are produced in Mexico and utilize battery cells from LG Energy Solution’s plant in Poland.
Globally, Ford’s electric vehicle business has faced considerable losses, leading to a one-year extension of its target to build 600,000 electric cars worldwide, which was originally set for the end of 2023. These strategic adjustments aim to navigate the challenges posed by the evolving electric vehicle market and bolster Ford’s position in the highly competitive Chinese electric car segment.
