Ford’s renewed investment into its electric vehicles has the potential to either breathe new life into a division hemorrhaging money from past failed endeavors, or be a death knell for the American auto brand, analysts warned.
At the foundation of Ford’s new line of affordable cars is its new “universal EV platform,” which can produce higher-quality cars with less expensive parts, according to Ford CEO Jim Farley.
“We tore up the moving assembly line that you see here today, and we came up with a brand-new concept,” Farley said at the company’s Louisville factory on Monday. “This is the most radical redesign of how we manufacture cars since the Model T.”
Analysts, however, are approaching Farley’s lofty EV goals with caution, warning Ford will have to deliver on its promises to have a shot at overcoming billions of losses from its “Model E” EV division. It will have to compete with not only growing American competition but also the attention of consumers who have been hot and cold on EVs.
“If the vehicles don’t appeal due to being EVs, then billions will be wasted,” Morningstar equity strategist David Whiston told Fortune. “That’s why you need a great product, great range, and lower battery cost and vehicle manufacturing techniques.”
He added, “The challenge is, do you have a great product or not? [It’s] hard to get excited about a vehicle you can’t see yet.”
Ford did not immediately respond to Fortune’s request for comment.
“EV progress is exponential, so a strategy five years ago that may have disappointed is in an entirely different global context today,” Atkins told Fortune in an email. “If it does fail, it could be terminal for the brand.”
“We are doing so many new things I can’t tell you with 100% certainty that it will all go just right,” he said.
