ord has announced plans to cut 4,000 jobs across its European operations by 2027, representing 14% of its workforce in the region. This move follows similar measures by VW, Audi, and Nissan, as Europe’s automotive market contends with slower than expected growth and strong competition. The majority of the cuts, 2,900 positions, will affect Germany, with the remainder distributed across Ford’s European facilities.

Chinese competition and poor European EV growth

The company cited a need to establish a “cost-competitive structure” to ensure its long-term viability in Europe. In a statement, Ford acknowledged weaker-than-expected demand for EVs and escalating competitive pressures, particularly from Chinese automakers. These challenges have forced the automaker to reduce shifts at several plants, focusing on aligning production with subdued EV demand. Ford’s challenges come against the backdrop of the EUs tariffs on Chinese made BEVs becoming permanent at the end of October.

Ford’s challenges in figures

Ford’s sales figures reflect the broader difficulties facing the European auto industry. Between January and September 2024, Ford’s total vehicle sales in Europe dropped 8% year on year, while EV sales fell by 6% over the same period. Earlier this year, Ford abandoned its target to transition its European lineup exclusively to BEVs by 2030, stating that the goal was overly ambitious. Despite this, Ford this year has pushed forward with new BEV launches, including electric versions of the Explorer and Capri. In addition to this over the past four years it stopped the production of its Fiesta, Mondeo and Galaxy.

Read: Automakers feeling the squeeze on profits, is electrification taking its toll?

The high costs of electrification

Ford’s electrification process has proven costly. In Q3 2024, the automaker’s EV division reported a USD1.2 billion loss, equating to approximately a USD50,000 loss per EV sold, with just 23,500 units delivered in the quarter. Rising production expenses, coupled with high labour costs in Europe, have forced Ford to implement aggressive cost-cutting measures.

In response, Ford has urged European governments to provide stronger incentives to help automakers meet stringent emissions regulations, including the UK’s Zero Emission Vehicle (ZEV) mandate.

Read: Will vehicle manufactures reach the UK’s 2024 ZEV mandate targets?

How does Ford’s position differ to other players?

While many automakers face declining profits due to reduced market shares in China, Ford’s absence from the Chinese market sets it apart. Players like VW, Nissan or Mercedes-Benz are facing strong domestic competition in the increasingly electrified Chinese vehicle market, while Ford’s restructuring in Europe is driven primarily by regional factors. Despite its struggles, Ford’s need to cut costs is less urgent than compared to rivals with global challenges. However, the company has indicated if European markets remain subdued more cost cutting measure will need to be implemented.

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