What Ford's EV strategy means for Fiesta, Focus and Dagenham

Ford’s announcement on Monday that it will launch seven new electric vehicles in Europe by 2024 – five passenger vehicles and two vans – left open more questions about the company’s future structure and ambitions in Europe than it answered. Questions put by journalists to Ford of Europe’s president, Brit Stuart Rowley, following the announcement were smoothly rebuffed. Here we highlight the outstanding questions and attempt to answer them, using both Rowley’s coded answers and Ford’s previous indications. What happens to the Ford Fiesta? The Monday announcements are “not the end of the journey” for Ford on electrification, Rowley said in response to this question. But it seems unlikely the Ford Fiesta will exist as we know it going forward. Ford will move to EV-only for its passenger vehicles in Europe by 2030 and small EVs are hard to make money on – a negative for the Fiesta, given that Ford is doing everything it can to staunch years of losses in Europe. In fact, Ford is gradually moving the Fiesta’s Cologne, Germany facility to EVs from 2023, although Ford hasn’t indicated when production of the Ford Fiesta will actually stop. One possibility is that the Fiesta’s role will be taken by the passenger ‘Tourneo’ version of the small Transit Courier van being made in Romania from 2023. Offered as a petrol, diesel and, from 2024, as an EV, the car’s lower-cost van roots would let it fulfil the role of basic transport that small cars traditionally used to inhabit, instead of the mini-sports limo that cars like Fiesta have evolved into. For Autocar Business webinars and podcasts, visit Autocar Business Insight Ford’s statement that it will carry on selling combustion-engined vans until 2035 gives it a loophole to sell this welcome cheaper-end model for a good 10 years yet. Why is Ford’s Turkey joint venture buying the Puma plant? This was one of the most interesting elements of the announcement from a business point of view. Ford Otosan makes Transits for Ford in Turkey and very successfully, too, supplying a growing demand for Ford’s vans across Europe (including a whopping 34% of the overall LCV market in the UK past year). On Monday, we heard that Ford Otosan is buying out Ford’s Craiova plant, where it makes the Ford Puma small SUV, outgoing EcoSport small SUV and, from 2023, the new small Transit Courier van and car. Rowley’s answer that it will “better utilise our resources” in Europe was too vague to give a real clue, but the answer could lie in Ford’s recent split of its vehicle development and assembly into three business units: Model E for electric, Ford Blue for internal-combustion-engine vehicles and Ford Pro for commercial vehicles. Moving the ownership of Craiova to Ford Otosan places it in the Ford Pro division, despite it still making Puma. Ford’s commercial vehicles division is profitable and its Romanian plant, with its lower production costs compared with Germany, is very likely profitable, too (Ford doesn’t provide detailed figures), so that will look good on Ford Pro’s books come financial results time. Craiova could also conceivably supply Volkswagen with small vans within the two companies’ van-swap relationship. What happens to the Ford Ford Kuga? A good question that wasn’t addressed. Rowley pointed out that the Kuga is currently key to Ford’s emissions reduction in Europe because of its plug-in hybrid, but the Kuga’s role will ultimately be taken by the new electric SUV built in Cologne from 2023 on the VW MEB platform, the one that underpins the VW ID 3 and many others. A second ‘sports crossover’ due in 2024, likely a coupé-styled version of the SUV, will give Ford the coverage it needs in that crucial segment in an EV era. Unless Ford names one of the two new SUVs ‘Kuga’, the model looks destined to be phased out when it reaches the end of its life, likely around 2026 but possibly before. And the Ford Focus? Ford pointed out that 58% of sales last year in Europe were SUVs, meaning that the market for the Focus is dwindling. Sales nearly halved last year to go under 100,000 units in Europe. Ford said its new Model E electric and Ford Pro commercial divisions will “define Ford’s future in Europe”. However, no role was assigned to Ford Blue, the new ICE division that’s expected to generate much of the company's income in the US. That leaves a massive question mark over the Focus. The only way for Ford to reliably swing to profit in Europe is to shed vehicle assembly plants, and the Focus plant in Saarlouis, near the French border with Germany, would likely be first on the chopping block. The Valencia plant in Spain, where it makes the Kuga and (in ever dwindling numbers) Ford Mondeo, Ford Galaxy and Ford S-Max, looks to be second. The sheer size of the $2 billion (£1.53bn) investment promised in the announcement to electrify Ford’s plant in Cologne sucks much of the remaining hope for a revival of its plants in Valencia and Saarlouis, barring huge cash injections from local governments. What about Dagenham? News that Ford’s Ford Transit range and other commercials will go zero-emission by 2035 seemed to spell the end for Dagenham, the former vehicle assembly plant on the banks of the Thames in east London that now builds diesel engines for those commercials. Any hope of a revival in the EV era must surely be dashed by Ford’s announcement that it will build a battery plant for commercial vehicles in Turkey with its joint venture partner there, Koc Holdings, spelling the end of the distant dream that Ford might repurpose Dagenham by swapping cylinders for cells. Rowley pointed out that Ford will need a lot of diesel engines by 2035. “The diesel segment in LCVs in the medium term will remain very important,” he said. But aside from the good news last year of the switch to electric transmissions for Ford’s gearbox plant in Halewood, Merseyside, the UK’s role in Ford’s future looks to be mainly one of development of new commercial EVs at its long-term engineering centre in Dunton, Essex, rather than an industrial contributor to their success.