(Dec 9): Ford Motor Co is turning to Renault SA to make affordable electric cars in Europe as both manufacturers come under rising pressure from Chinese manufacturers expanding in the region.
Renault will help develop and produce two Ford-branded models in northern France, with the first vehicle expected to reach showrooms in early 2028, the companies said Tuesday. They also agreed to explore jointly making vans.
“The reality of the car business is it takes capital and you have to be competitive on cost,” Ford chief executive officer Jim Farley told reporters during a briefing in Paris. “These are just building blocks to make a successful business in Europe.”
Automakers in Europe are trying to become more competitive as the likes of BYD Co expand in the region with low-cost electric and hybrid models. At the same time, they’re tapping Chinese technology expertise to move faster for less. Renault has relied on its Shanghai R&D centre to develop the electric Twingo, which will be available for below €20,000 (US$23,299 or $30,220) by next summer.
For Ford, the move may signal a further reduction of its own production footprint in Europe as the company cuts output and staff in a region that has long lagged its North American arm.
See also: Honda cuts outlook on global chip shortage, gloomy EV demand
At its plant in Cologne, Germany, where Ford makes EVs based on a Volkswagen AG platform, the automaker is letting go of hundreds of workers and plans to move to a single production line, from the current two, beginning in 2026, it said in September. It’s already stopped making cars at a German factory in Saarlouis.
Instead, Ford is turning to partnerships to share costs and production for what it promises will be a “new product offensive” in Europe. Farley said the American automaker will not be a full-line manufacturer, as it has been in the past, but instead focus on car categories where it believes it has a competitive advantage. “We will select where we compete very carefully,” the CEO said.
Manufacturers are rethinking EV strategies after their initial efforts stumbled because of a dearth in charging infrastructure and models that proved too expensive. After intense industry lobbying, the European Union may walk back its de-facto ban of combustion-engine car sales slated for 2035 due to a slower-than-expected shift to EVs. An update from Brussels is expected for later this month.
See also: China blows past record for Europe car sales on hybrid, EV gains
“The approach to regulation — mandate it and they will buy it — has failed,” Farley said Monday in a commentary published by the Financial Times. At the same time, “we face a flood of state-subsidised EV imports from China, structurally designed to undercut European labour and manufacturing.”
Meanwhile, automakers are trying to correct their mistakes by offering cheaper EVs. Stellantis NV in November said it boosted output of Citroëns due to strong demand for the affordable C3 city car. VW is preparing budget EVs including the ID. Polo, which is expected to be priced below €25,000 when it goes on sale next year.
Aside from cooperating on EVs, Ford and Renault intend to work together also on developing and producing vans for both brands.
“There is no other choice than to share resources,” Renault CEO Francois Provost said at the same briefing, adding that Europe’s light commercial vehicle market is “core” for both partners.
Uploaded by Chng Shear Lane
