Ford Embraces Closer Customer Relationships, Moves Away from Transactional Business Model

Ford Motor Co. in Dearborn today announced it is breaking away from the transactional, build-and-sell business model that has typified the auto industry for decades. In its place comes Ford+, which is characterized by developing close, enduring customer relationships, boosting investments in disruptive technologies, and adding more EVs.
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Ford F-150 lightning pro towing a bulldozer
Rendering of a Ford F-150 Lightning Pro, their newest consumer model electric pickup truck. Ford+ will expand the companies EV presence. // Rendering Courtesy of Ford Motor Co.

Ford Motor Co. in Dearborn today announced it is breaking away from the transactional, build-and-sell business model that has typified the auto industry for decades. In its place comes Ford+, which is characterized by developing close, enduring customer relationships, boosting investments in disruptive technologies, and adding more EVs.

At the core of the capabilities is Blue Oval Intelligence, Ford’s next-generation, cloud-based platform for integrating electrical, power distribution, computing, and software systems in connected Ford and Lincoln vehicles.

“I’m excited about what Ford+ means for our customers, who will get new and better experiences by pairing our iconic, world-class vehicles with connected technology that constantly gets better over time,” says Jim Farley president and CEO of Ford. “We will deliver lower costs, stronger loyalty, and greater returns across all our customers.

“This is our biggest opportunity for growth and value creation since Henry Ford started to scale the Model T, and we’re grabbing it with both hands.”

Ford is adding more fully electric vehicles, commercial solutions, and connected services. John Lawler, CFO of Ford, says the automaker is allocating more capital to those priority areas to produce value for customers and shareholders.

“We’re fueling Ford+ by further strengthening our core automotive operations and generating consistently healthy cash flow that will fund growth and create value,” says Lawler.

The company expects to deliver an 8 percent adjusted EBIT (earnings before interest and taxes) margin in 2023.

In other news, Ford is:

  • Accelerating investments and increasing planned total spending on electrification, including battery development, to more than $30 billion by 2025 — while deriving efficiencies from Ford’s flexible EV architecture and modular technologies.
  • Anticipating 40 percent of Ford’s global vehicle volume to be fully electric by 2030, including from:
    • Mustang Mach-E, which is bringing new customers to Ford — 70 percent of buyers, to date
    • The F-150 Lightning, an all-electric version of the world’s most popular pickup truck, which has amassed 70,000 customer reservations since it was unveiled one week ago, and
    • E-Transit commercial vans, which will be on the road later this year.
  • Investing in battery technology and equipping Ford to design, engineer and manufacture its own batteries, with key developments including:
    • Creating Ford Ion Park, a global center of battery excellence comprising more than 150 experts in battery chemistries, testing, manufacturing and value-chain management who will boost battery range and lower costs to customers and Ford
    • Vertically integrating battery technology with an extensive range of EV batteries — IonBoost lithium ion; IonBoost Pro lithium iron phosphate for commercial vehicles; and long-range, low-cost solid-state batteries based on Ford’s own engineering and know-how from Solid Power, in which the company holds an equity stake, and
    • Forming a joint venture, BlueOvalSK, with SK Innovation to manufacture battery cells and arrays at two plants in the U.S. for future Ford and Lincoln vehicles.

Creating a Business Dedicated to Commercial Customers

  • Establishing Ford Pro, a global vehicle services and distribution business within Ford devoted to commercial and government customers, and led by Ted Cannis, who’s been named CEO and a corporate officer.
    • Cannis has been head of Ford’s North America CV business and previously managed the Team Edison EV development group.
  • Providing customers with greater value and higher productivity through:
    • The industry’s most comprehensive and flexible range of electric and internal-combustion commercial vehicles
    • Digital and physical services that can help optimize and maintain customer fleets
    • Public, depot and employee home charging of EVs for the next day’s work, and
    • Bundled financing of vehicles, services and charging.
  • Increasing the commercial market for hardware and adjacent and new services that’s addressable by Ford – with anticipated company revenue of $45 billion by 2025, up from $27 billion in 2019.

Connecting With Customers via Connected Services

  • Having about 1 million vehicles that are capable of receiving over-the-air system updates on the road by the end of this year, exceeding Tesla’s volume by July 2022, and scaling to 33 million OTA-enabled Ford and Lincoln vehicles by 2028.
  • Strengthening customer relationships with digitally enabled tools like Ford Pass and Lincoln Way, online ordering, simplified financing and renewal options, vehicle pick-up and delivery, and mobile repairs.
  • Extending digital lifestyles by fully integrating best-in-class technology from, e.g., Apple, Amazon, Google and Baidu.
  • Speeding detection and resolution of quality issues using connected data – helping to raise customer satisfaction and lower warranty costs.
  • Deploying distinctive connected functions like Ford’s BlueCruise driver-assist technologies, new features and upgraded software content, and EV charging to improve the user experience – and capitalize on what is projected to be a $20 billion market for such services by 2030.

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