On September 15, Ford Motor Company declared that it would lay off up to 1,000 workers at its Cologne, Germany, electric vehicle production. According to the firm, the decision was made because battery-powered car sales are falling short of projections.
According to an AP story, the automaker clarified that it will use buyout packages and voluntary departures to try to lessen the impact on workers. Additionally, production will be reduced at the Cologne facility that manufactures the electric Explorer SUV. The facility will switch from two daily shifts to one starting in January.
Ford: Weak Electric Vehicle Demand in Europe
EV sales have not increased as rapidly as many automakers had anticipated, despite significant investment. According to the company’s official statement, the demand for electric vehicles in Europe is much lower than what the industry had predicted. This round of layoffs comes after Ford’s November 2024 announcement of its reorganisation plan.
The corporation announced at the time that it will eliminate roughly 4,000 jobs across Europe and the UK, with 2,900 of those positions being in Germany. Prior to an agreement with the IG Metall union that guaranteed employment for almost 10,000 workers at the Cologne facility until 2032, workers had gone on strike earlier this year, according to news agency AFP.
About $2 billion (2.3 billion euros) has already been spent by Ford to update the Cologne facility for the manufacture of electric vehicles. Sales momentum has been lower than anticipated, despite the fact that the modifications were done in anticipation of increased demand for low-emission automobiles.
Why Electric Vehicle Demand is Not Picking up in Europe?
In Europe, EV adoption has been hampered by high initial costs and a dearth of charging points. The elimination of purchase subsidies in Germany is another factor that has further hindered growth.
Through July of this year, electric vehicles made up 15.6% of the European market, up from 12.5% the previous year. But the growth hasn’t been as rapid as anticipated. In the first seven months of the year, Ford sold 260,000 cars of all kinds, a slight 0.7% rise. According to the European Automobile Manufacturers’ Association, its market share stuck at 3.3%.
India’s EV Market: A Contrast to Europe
The electric vehicle (EV) market in India is expanding quickly thanks to government subsidies, growing environmental awareness, and technology breakthroughs. India hopes to dramatically boost EV adoption through programs like the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme, transforming its transport system in the direction of sustainability and innovation.
By 2030, India wants to increase the percentage of sales of electric vehicles (EVs) to 30% for private automobiles, 70% for commercial vehicles, 40% for buses, and 80% for two- and three-wheelers. By 2030, there will be 80 million EVs on Indian roadways, which is an ambitious goal.
Quick
Shots
•Production of electric Explorer SUV
reduced; plant to move from two shifts to one in January 2026.
•Layoffs to be managed via buyouts and
voluntary exits to soften impact.
•Ford cites EV demand in Europe
falling short of industry forecasts despite heavy investments.
•$2 billion invested in upgrading
Cologne facility for EV production, but sales momentum lagging.
Ford, the iconic American automotive manufacturer, has been a driving force in the industry for over a century. Founded in 1903 by Henry Ford, the company revolutionized the way we think about transportation and paved the way for modern industrial production. From the early days of the Model T to the sleek and powerful vehicles of today, Ford has consistently delivered quality, innovation, and durability.
Over the years, Ford has cemented its place as one of the largest and most successful car companies in the world. With a long and storied history, the company has faced many challenges and triumphs, from surviving the Great Depression to helping win World War II with its production of tanks and aircraft.
Despite facing fierce competition from other automakers, Ford has continued to thrive in the market. The company’s sales have remained strong, with millions of cars sold every year across the globe. As of 2025, Ford is the seventh-largest car manufacturer in the world by sales volume.
One of the keys to Ford’s success has been its commitment to innovation and development. The company has a long list of achievements, from the creation of the first moving assembly line to the development of cutting-edge technologies like hybrid and electric vehicles. Ford has also been a leader in safety features, with its advanced systems helping to reduce accidents and save lives on the road.
Today, Ford is a major player in the automotive industry, with a strong presence in both domestic and international markets. The company’s current lineup of vehicles is diverse and impressive, with options for every type of driver and every type of lifestyle.
But perhaps just as important as Ford’s products are its marketing strategies. The company has long been known for its bold and innovative advertising campaigns, which have helped to establish the brand as a symbol of American strength and ingenuity.
Ford is a true American icon, a company that has weathered countless storms and emerged stronger than ever. With its commitment to innovation, quality, and bold marketing, Ford is sure to continue shaping the automotive industry.
When it comes to Ford’s target customers, Ford has a diverse and expansive customer base that spans the globe. The company offers a range of vehicles that cater to different demographics, lifestyles, and budgets, making it a popular choice for drivers of all kinds.
In terms of demographics, Ford’s target audience tends to skew toward middle-aged and older adults, with an emphasis on families and working professionals. The company’s SUVs and pickup trucks are particularly popular among these groups, as they offer plenty of space, versatility, and practicality for everyday use.
However, Ford also appeals to younger drivers, with its Mustang and Focus models offering a sportier, more youthful appeal. Additionally, the company’s focus on innovation and sustainability has helped to attract environmentally-conscious drivers of all ages.
Geographically, Ford has a strong presence in both domestic and international markets. In the United States, the company’s trucks and SUVs are especially popular in rural and suburban areas, while its smaller vehicles are favored in urban settings. Overseas, Ford has a significant presence in Europe, South America, and Asia, where its vehicles are tailored to local needs and preferences.
Other factors that influence Ford’s target audience include income level, lifestyle, and brand loyalty. The company’s luxury models, such as the Lincoln Navigator, are aimed at higher-income consumers who value luxury and performance, while its more affordable models appeal to budget-conscious buyers.
Ultimately, Ford’s target audience is diverse and multifaceted, reflecting the company’s commitment to innovation, quality, and versatility. Whether you’re a family on the go, a working professional, or a young driver looking for a sporty ride, Ford has a vehicle that is sure to meet your needs and exceed your expectations.
Ford’s success in the automotive industry can be attributed in part to its effective marketing mix, which encompasses the four Ps: product, price, promotion, and place. By carefully considering each of these factors and tailoring its approach to different markets and audiences, Ford has been able to establish a strong brand identity and maintain a loyal customer base.
Ford Marketing Mix
Ford Product Strategy
The company offers a range of vehicles, from pickup trucks and SUVs to sports cars and hybrids, that cater to different lifestyles, budgets, and preferences. Ford places a strong emphasis on innovation, regularly introducing new technologies and features to stay ahead of the competition. The company also prioritizes safety and sustainability, incorporating advanced safety systems and environmentally friendly technologies into its vehicles.
Ford’s Range of Vehicles
Ford Price Strategy
The company offers a range of pricing options, from budget-friendly to luxury, to appeal to a wide range of consumers. Ford also offers financing and leasing options to make its vehicles more accessible to those on a tight budget.
Pricing of Ford Vehicles
Ford Place Strategy
The company has a strong global presence, with dealerships and showrooms located around the world. In addition to traditional dealerships, Ford also sells its vehicles online, allowing customers to browse and purchase cars from the comfort of their own homes.
Ford Promotion Strategy
The company’s advertising campaigns, which often feature bold and memorable slogans like “Built Ford Tough” and “Go Further”, help to establish the brand’s identity and appeal to a diverse range of consumers. Ford also sponsors a variety of sports teams and events, leveraging its association with athleticism and strength to attract customers.
Ford’s marketing mix is a carefully crafted strategy that takes into account the needs and preferences of its diverse customer base. By prioritizing innovation, safety, sustainability, and accessibility, and by leveraging effective advertising and distribution strategies, Ford has established itself as a leader in the automotive industry.
Ford Motor Company has launched several successful marketing campaigns over the years, each designed to promote its vehicles and strengthen its brand identity. One of its most notable campaigns is “Built Ford Tough”, which emphasizes the durability and toughness of its trucks and SUVs. The campaign features dramatic visuals and catchy slogans, such as “Built to Last” and “Toughness isn’t just a word. It’s a promise”.
F-150 Lightning: 10,000 LB Max Towing Testing | Built Ford Tough | Ford
Another memorable campaign is “Go Further”, which showcases Ford’s commitment to innovation, sustainability, and social responsibility. The campaign features a variety of ads highlighting the company’s eco-friendly technologies and community outreach programs, such as the Ford Volunteer Corps. The campaign also promotes the company’s new electric and hybrid models, positioning Ford as a leader in sustainable transportation.
Ford Go Further
In recent years, Ford has also launched successful social media campaigns, such as the “Ford Fiesta Movement”. This campaign invited social media influencers to test drive the Ford Fiesta and share their experiences with their followers. The campaign generated significant buzz and helped to attract a younger, more tech-savvy audience to the brand.
Ford’s marketing campaigns have been instrumental in establishing its brand identity and promoting its vehicles to a diverse range of consumers. By leveraging bold visuals, catchy slogans, and innovative approaches to advertising, Ford has cemented its position as a leader in the automotive industry.
Ford is a brand that has been around for over a century, and its longevity can be attributed to its ability to adapt to changing market conditions and consumer preferences. One of the keys to Ford’s success has been its effective marketing strategies. Here are the top Ford’s marketing strategies that the company has employed to build its brand and sell its vehicles.
Innovation
Ford has always been a company that prides itself on innovation. It was the first company to introduce the assembly line, and it continues to lead the way in developing new technologies, such as hybrid and electric vehicles, that appeal to environmentally-conscious consumers.
Brand Identity
Ford has a strong brand identity that is built around concepts such as strength, reliability, and toughness. Its “Built Ford Tough” campaign is a perfect example of this, as it emphasizes the durability and ruggedness of its trucks and SUVs.
Social Media
Ford has leveraged social media platforms such as Facebook, Twitter, and Instagram to connect with consumers in a more personal and engaging way. Its “Ford Fiesta Movement” campaign, which invited social media influencers to test drive the Fiesta and share their experiences online, was a huge success.
Sponsorships
Ford has sponsored a variety of sports teams and events, such as the NFL and NASCAR, to increase its visibility and appeal to a wider audience. This has helped to establish the brand’s association with athleticism and strength.
Ford Marketing Strategy
Community Outreach
Ford has a long history of giving back to the community. Its Ford Volunteer Corps program, which encourages employees to volunteer their time and skills to local nonprofits, has helped to strengthen the brand’s reputation as a socially responsible company.
Targeted Advertising
Ford tailors its advertising campaigns to specific demographics and markets. For example, its Mustang ad campaigns often target younger, more tech-savvy drivers, while its F-150 campaigns focus on working professionals and families.
Sustainability
Ford has made sustainability a priority in recent years and has introduced a range of eco-friendly technologies in its vehicles. Its “Go Further” campaign highlights these efforts and positions Ford as a leader in sustainable transportation.
Corporate Social Responsibility (CSR)
Ford is working hard to protect the environment and support eco-friendly drivers. It aims to become carbon neutral by 2050 and is changing how it makes cars to reduce pollution. Ford plans to build 2 million electric vehicles every year by 2026, which produce no harmful emissions. It also uses recycled materials like fabric and soy-based foam in its cars to cut down on waste. Along with this, Ford supports local communities by investing in education, job training, and social justice programs.
Digital Marketing
Ford has embraced digital marketing channels such as email and search engine marketing to reach consumers where they spend most of their time – online. By using targeted messaging and personalized content, Ford can connect with consumers in a more meaningful way.
Product Placement
Ford has strategically placed its vehicles in popular movies and TV shows, such as the “Fast and Furious” franchise and “American Idol”, to increase its brand visibility and appeal to a wider audience.
Conclusion
Ford’s success in the automotive industry can be attributed in large part to its effective marketing strategies. As the automotive market continues to evolve, it will be interesting to see how Ford adapts its marketing strategies to stay ahead of the competition and maintain its position as a top brand.
As a marketer or a startup, there is much to be learned from Ford’s marketing strategies. The company has successfully adapted to changing market conditions, embraced new technologies and trends, and developed a strong brand identity that resonates with consumers. By studying the marketing tactics that Ford has employed over the years, you can gain valuable insights into what it takes to build a successful brand and promote your products or services effectively.
Whether you are looking to establish a strong brand identity, connect with consumers on social media, or embrace sustainability and eco-friendliness, there are lessons to be learned from Ford’s marketing campaigns. By using targeted advertising, digital marketing, and product placement, you can increase your brand’s visibility and appeal to a wider audience.
Moreover, Ford’s community outreach efforts, such as its Ford Volunteer Corps program, serve as a reminder that building a strong brand is not just about selling products, but also about giving back to the community and making a positive impact on society.
Ford’s marketing strategies provide a roadmap for success that can be applied to any industry or business. So take a cue from Ford’s marketing playbook and apply these lessons to your marketing efforts to drive growth, build brand awareness, and connect with consumers in a meaningful way.
FAQs
Who is the founder of the Ford company?
Henry Ford founded Ford in 1903.
What is Ford target audience?
Ford’s target market is diverse and multifaceted, reflecting the company’s commitment to innovation, quality, and versatility. Whether you’re a family on the go, a working professional, or a young driver looking for a sporty ride, Ford has a vehicle that is sure to meet your needs and exceed your expectations.
What are the marketing strategies of Ford?
The marketing strategies of Ford are:
Innovation
Brand Identity
Social Media
Sponsorships
Community Outreach
Targeted Advertising
Sustainability
Digital Marketing
Product Placement
What is Ford advertising strategy?
Ford advertising strategy focuses on powerful slogans like “Built Ford Tough” and “Go Further” to highlight strength, reliability, and innovation. The brand uses TV, digital media, and sponsorships of sports events to connect with a wide and diverse audience.
How does Ford advertise?
Ford advertises through TV, digital ads, social media, and sports sponsorships. It uses strong slogans like “Built Ford Tough” to promote reliability and innovation.
With the rise in Electric Vehicles around the globe the market has grown in the past decade. There is a lot of competition among brands to bring out the best Electric Vehicles. The race is both in the two wheeler and four wheeler sectors. Not to forget the bigger vehicles too in this competition! If you are planning to buy an EV or want some information about the trending EVs globally then here is a listicle. Let us dive into the world of EVs and check out the top 10 EVs in the world.
Tesla, Inc. is an American electric vehicle and clean energy company founded in 2003, known for its mission to speed up the world’s transition to sustainable energy through innovative products and solutions. The company was established by engineers Martin Eberhard and Marc Tarpenning, with Elon Musk joining shortly after as a significant investor and later becoming the CEO.
The company has pioneered several key innovations in the automotive industry. High-performance electric vehicles, advanced battery technology, and autonomous driving capabilities are their innovations. Their contribution to the evolution of electric mobility include:
Tesla Roadster
Model S
Model 3
Model X
Model Y
Tesla’s impact on the market has been profound, as it has spurred a global shift towards electric vehicles. This is after it only disrupted traditional automotive manufacturers. The company has reported increasing sales figures. Also, a significant growth in both production and delivery, reflects a rising consumer demand. Besides electric vehicles, Tesla has expanded its portfolio to include energy storage solutions. This diversification aligns with the company’s overarching goal of promoting renewable energy and reducing reliance on fossil fuels.
BYD Auto
Company
BYD Auto
Founded
1995
Market Cap (September 2024)
$99.06 Billion
Origin
China
Website
byd.com
Top EV Companies – BYD Auto
BYD Auto, established in 1995, originated as a rechargeable battery manufacturer. Then it diversified into the automotive sector. The company has evolved into a leading player in the electric vehicle market. It is driven by its commitment to innovation and sustainability. Its headquarters are located in Shenzhen, China. The headquarters has developed a robust infrastructure for research and development.
The company offers passenger cars, buses, and commercial vehicles. BYD’s electric vehicle range is characterized by:
advanced battery technology,
impressive driving ranges, and
a focus on environmental sustainability.
Models such as the BYD Han and BYD Tang have gained attention for their performance and features.
BYD Auto has made significant strides in global expansion. This has helped in establishing a presence in various international markets. The company has formed strategic partnerships and collaborations to enhance its market reach. It has invested in local manufacturing facilities to meet regional demand.
Established in 1908, GM is evolving through various phases of innovation and adaptation. The company has increasingly focused on electrification, recognizing the need to transition from traditional internal combustion engines to EVs.
The launch of the Chevrolet Bolt marked a significant milestone for GM, as it was one of the first affordable all-electric vehicles to offer a substantial driving range, thereby making electric mobility more accessible to the general public. Additionally, the introduction of the Hummer EV represents a bold step in reimagining a classic brand, showcasing GM’s capability to produce high-performance electric vehicles that appeal to both adventure enthusiasts and environmentally conscious consumers.
GM’s long-term vision is centered around achieving an all-electric future, with ambitious goals to eliminate tailpipe emissions from new light-duty vehicles by 2035.
Volkswagen AG
Company
Volkswagen AG
Founded
1937
Market Cap (September 2024)
$52.74 Billion
Origin
Germany
Website
volkswagen-group.com/en
Top EV Companies – Volkswagen AG
Volkswagen AG is undergoing a transformation. It has shifted from conventional manufacturing to electric vehicles (EVs). The company is reflecting a strategic response to the evolving automotive landscape. This transition involves large investments in R&D, and new production facilities.
The ID series represents an innovative approach to electric mobility. It features a range of models designed to cater to diverse consumer needs. This series includes vehicles such as the ID.3 and ID.4. These are equipped with cutting-edge features and sustainable design elements. Volkswagen AG is dedicated to sustainability, aiming to reduce its carbon footprint. The company has set ambitious future goals, thereby contributing to a more sustainable automotive industry.
Hyundai Motor Company
Company
Hyundai Motor Company
Founded
1967
Market Cap (September 2024)
$43.79 Billion
Origin
South Korea
Website
hyundai.com/worldwide/en
Top EV Companies – Hyundai Motor Company
Hyundai Motor Company has made significant strides in the EV sector, focusing on innovative technologies and sustainable practices. The company aims to expand its EV lineup. It looks at investing in R & D for improve battery efficiency and charging infrastructure. This in turn promotes a greener automotive future.
Among the notable electric models introduced by Hyundai are
Hyundai Ioniq
Kona Electric
The Ioniq series offers a range of options, including
The Ford Motor Company has undergone significant transformations in response to the evolving automotive landscape. This shift has necessitated a comprehensive reevaluation of their product offerings. In line with this transition, Ford has launched innovative electric models such as:
Mustang Mach-E: an all-electric SUV that combines performance with eco-friendliness,
F-150 Lightning: an electric version of their iconic pickup truck.
These vehicles not only reflect Ford’s commitment to electrification but also aim to capture the interest of a diverse consumer base seeking modern, sustainable transportation options. To solidify its position in the market, Ford has developed plans that encompass increased investment.
Rivian Automotive
Company
Rivian Automotive
Founded
2009
Market Cap (September 2024)
$13.60 Billion
Origin
USA
Website
rivian.com
Top EV Companies – Rivian Automotive
Rivian Automotive was established with a mission to revolutionize the automotive industry. It aimed at producing sustainable electric vehicles. Such vehicles were designed to cater to the needs of adventure-seeking consumers. The innovation involved environmental responsibility.
The company has concentrated its efforts on developing electric trucks and SUVs. It aims to capture a significant share of the growing market for electric vehicles. The emphasis is given to offering products that combine rugged performance with advanced technology and eco-friendly features. Rivian has attracted large investment from various sources. Such investments have positively influenced its market reception. This has led to heightened interest and anticipation for its vehicle offerings.
NIO Inc.
Company
NIO Inc.
Founded
2014
Market Cap (September 2024)
$10.96 Billion
Origin
China
Website
ir.nio.com
Top EV Companies – NIO Inc.
NIO Inc. is a prominent electric vehicle manufacturer established in 2014. The company was founded by William Li. He aimed to create high-performance electric vehicles.
NIO vehicles stand out in the crowd by their cutting-edge features, which include
advanced battery swapping technology,
autonomous driving capabilities, and
focus on user-centric design.
These attributes not only enhance the driving experience but also address concerns such as:
range
charging times
positioning
The company has experienced growth since its start. It is marked by increasing sales figures and expanding market presence. With an aim to solidify its market presence, NIO plans to:
innovate product lineup
enhance service offerings
explore international markets
Lucid Motors
Company
Lucid Motors
Founded
2007
Market Cap (September 2024)
$8.91 Billion
Origin
USA
Website
lucidmotors.com
Top EV Companies – Lucid Motors
Lucid Motors was established with the vision of redefining the luxury automotive experience. The company aims to create high-performance electric vehicles. These vehicles not only meet but exceed the expectations of discerning consumers. They emphasize a commitment to environmental responsibility and cutting-edge design.
The flagship model, the Lucid Air, exemplifies the brand’s dedication to excellence. It features impressive specifications such as
a range of over 500 miles on a single charge,
rapid acceleration capabilities, and
spacious, luxurious interior equipped with state-of-the-art technology.
The vehicle’s design integrates aerodynamics and efficiency, showcasing a sleek silhouette. The company differentiates itself from traditional luxury automakers by focusing only on electric powertrains, thereby appealing to environmentally conscious consumers who seek high-end vehicles without compromising on performance or style.
Xpeng Motors
Company
Xpeng Motors
Founded
2014
Market Cap (September 2024)
$8.26 Billion
Origin
China
Website
xpeng.com
Top EV Companies – Xpeng Motors
Xpeng Motors, founded in 2014, has emerged as a significant player in the electric vehicle industry. It is driven by a vision to create intelligent and connected vehicles. These vehicles enhance the driving experience. The company was established in Guangzhou, China.
The company is renowned for its cutting-edge technology and advanced smart features such as:
autonomous driving capabilities,
intuitive user interface,
robust suite of connectivity options.
Xpeng’s vehicles are equipped with proprietary software and hardware that enable over-the-air updates, ensuring that customers benefit from the latest advancements in automotive technology.
In recent years,it has expanded its footprint beyond the Chinese market. This expansion is characterized by:
establishment of local partnerships,
introduction of its flagship models,
commitment to meeting the diverse needs of global consumers.
The top EV companies are Tesla Inc., Ford Motor Company, Hyundai Motor Company, Lucid Motors, General Motors, NIO Inc., Rivian Automotive etc.
Who is the No. 1 EV company?
Tesla is considered the market leader in the EV sector. The American company was founded in 2003 by multi-billionaire Elon Musk.
Which country is leading in EVs?
The country which is leading in terms of the production of EVs is China. China produces more than 60% of EV batteries around the world.
What is the full form of BYD?
Build Your Dreams also known as BYD is a China-based multinational high-tech company. BYD Auto is one of the leading EV manufacturers around the world.
Company Profile is an initiative by StartupTalky to publish verified information on different startups and organizations. The content in this post has been approved byFord.
Ford Motor Company (often referred to as Ford) is an American multinational automotive manufacturer based in Dearborn, Michigan. Henry Ford created the company, which was formed on June 16, 1903. The Ford brand offers autos and commercial vehicles, whereas the Lincoln premium brand sells luxury cars.
Based on 2015 car production, Ford is the second-largest U.S. automaker, GM being the first. As per 2017 data by OICA, Ford is the fifth-largest automaker in the world, led by Toyota, Volkswagen, Hyundai, and GM. As published by carlogs.org, Ford Motor is the World’s fourth-largest car company on the basis based on 2020 revenue. Ford’s Revenue is projected to reach $140.80 billion in 2023. With an annual growth rate (CAGR 2023-2027) of 1.86%, the projected market volume is $151.60 billion by 2027.
The firm became public in 1956, although the Ford family retains 40% voting rights through special Class B shares.
Ford Motor Company is an American automaker that designs, manufactures, distributes, and serves a wide range of Ford trucks, SUVs, automobiles, and Lincoln luxury vehicles.
Automotive, Mobility and Ford Credit are the company’s three segments.
The Automotive division is responsible for designing, producing, distributing, and maintaining Ford and Lincoln cars, as well as their components and accessories. Ford Mobility is a wing dedicated to innovation in the automobile sector. Ford Mobility is working in the field of designing emerging mobility services and also invests in new innovative ventures in the automobile sector. Ford mobility is also working to develop autonomous vehicles. While Ford Credit division provides automobile financing and leasing services.
Ford also holds ownership in Argo AI, a developer of autonomous driving systems, and Spin, a micro-mobility service provider.
Ford – Industry
Before the coronavirus crisis threw the globe into chaos, the automobile sector had been on an upward trend throughout 2018 and had just begun a period of stagnation in 2019. Between March and May 2020, global car sales fell by almost 15% worldwide. China was the first market to recover from the crisis, with car sales remaining at pre-pandemic levels for months after the outbreak. Electric vehicles, autonomous driving, and mobility services are expected to continue to fuel the industry, resulting in an overall rebound in the coming quarters.
Ford Motor Company – Founder
In 1903, Henry Ford established the Ford Motor Company.
Founder of Ford – Henry Ford
Henry Ford
Henry Ford was born on July 30, 1863, in Springwells Township, Wayne County, Michigan to Mary and William Ford. While Henry was just 12, he had his own small self-built machine shop where he spent much of his time experimenting with machines. He was just 15 when he built his first steam engine.
Henry started his career as a machinist’s apprentice in the shops of James F. Flower and Brothers in Detroit(a city in the US). In July 1891, Henry joined as an engineer at the Edison Illuminating Company of Detroit and became the chief engineer of the company in 1893. During his stint at the Edison Illuminating Company, Henry ford also developed a deep friendship with Thomas Edison.
Henry Ford’s automobile manufacturing journey began in the winter of 1893 when he built a modest one-cylinder gasoline model inspired by his interest in internal combustion engines. On a wooden table in the kitchen of the Ford house at 58 Bagley Avenue in Detroit, the first Ford engine flickered to life. His first vehicle, which was a frame-mounted with four bicycle wheels, was powered by a later version of that engine. The Quadricycle, Ford’s first automobile, was built in June 1896.
Henry Ford resigned from Edison Illuminating Company in August 1899, to start his venture. In 1899, he created the Detroit Automobile Company, which became bankrupt just within 18 months of its inception.
Leaving the firm paved the door to his achievement. “Failure is merely the opportunity to begin again, this time more intelligently,” remarked Henry Ford. With this guiding concept in mind, he tried again and established what is today known as the Ford Motor Company in 1903. He also revolutionized the automobile business by introducing the then-unheard-of ‘assembly line’ for his vehicle manufacture. Ford grew to be one of the world’s most successful and lucrative businesses that even managed to survive the Great Depression of 1930.
Ford is also the world’s largest family-controlled company, which has been controlled by the Ford family for over 110 years. Volvo, Land Rover, Jaguar, Aston Martin, and Mercury were previously part of Ford’s premium portfolio. These brands were sold to other firms over time, and Mercury was eventually phased out.
Ford – Mission and Vision
Ford’s mission statement says, “to make people’s lives better by making mobility accessible and affordable.”
This mission statement emphasizes the movement of people, which is a fundamental function of vehicles and the transportation industry. The fact that Ford places such a high value on mobility reveals the company’s social mission. The firm strives to make people’s transportation more efficient as one of the largest participants in the international market.
Ford – Slogan, Tagline, and Logo
Ford’s Company Logo
Ford’s first slogan that was used by the company in 1914 was “Ford: The Universal Car.” Over the years Ford has tried to appeal to its customers across the world through various slogans. Some popular slogans by the company are –
Go Further
All-New Focus Drive One.
Everything We Do is Driven By You
Built Ford tough!
Ford has a better idea
Better Ideas. Driven by you
Built for the road ahead.
Have you driven a Ford lately
Quality is Job one
There’s a Ford in your Future.
If you haven’t looked at Ford lately, look again.
Build for life in Canada
Ford. Designed for living. Engineered to last.
The Best Never Rest.
Answer the call to any adventure.
‘Built Ford Proud’ is Ford’s latest slogan.
Ford – Business Model and Revenue Model
Ford’s operations are divided into three categories: “Automotive,” which is by far the largest, “Ford Credit,” and “Mobility.”
The majority of Ford’s revenue comes from producing and selling automobiles to consumers. Electric vehicles and self-driving automobiles are two areas where the firm wants to increase its capabilities. Ford also makes money through its leasing and financial divisions, which provide automobile loans and lease agreements to customers.
Ford Credit is a Ford service that supplies dealerships and consumers with a variety of automobile finance options. These solutions enable dealerships to buy new inventory and expand existing capabilities, as well as provide clients with finance for car purchases and leases without having to leave Ford’s business environment. In the United States, Canada, and Europe, Ford Credit is offered.
Ford’s Mobility business is primarily the company’s research and development division for self-driving cars and the software that goes with them. This segment generates no revenue because the company has yet to sell any of these cars.
Don Bunker, Pmp, Csm – Project Management Consultant
Aakash Puntambekar – Product Development Engineer
Aarik Kimberlin – Process Coach
Aaron Anderson – Parts Specialist
Aaron Bresky – Product Development
Aaron Brunke – Product Engineering Designer
Aaron Estelle – STA Engineer
Ford – Sponsorships
Ford Center in downtown Evansville, Indiana, and Ford Field in downtown Detroit are two major sports facilities sponsored by Ford In the USA.
Ford also sponsors many events across the globe. Ford is a major sponsor of Sky media channel’s coverage of Premier League football. Ford also sponsored the UEFA Champions League for 20 years, before ending the sponsorship in 2014.
In recent times, automobile demand in important countries such as North America and Europe, as well as China, has fallen short of expectations. These excesses have boosted prices for automakers that have ramped up their capabilities to match projected future growth, as Ford explains in its annual report. In China, for example, surplus capacity in the car sector reached 78% in 2018. According to Ford, surplus capacity will average 47 million vehicles until 2024.
The rush by automakers to tap into the enormous Chinese market has heightened competitiveness in the sector. This, along with declining demand and the growth of Chinese automakers like Chery Automobile Co. and BYD Auto Co., has put pressure on firms like Ford to maintain high prices.
The development of startups like BYD and Tesla (TSLA) has fueled demand for hybrids and electric vehicles, increasing competition and putting pressure on traditional automakers to make their vehicles more efficient and technologically advanced.
Ford – Investments
Date
Organization Name
Round
Amount
May 2, 2022
Cavnue
Series A
$130M
Sept 22, 2021
Redwood Materials
Private Equity Round
$50M
Jul 23, 2021
Rivian
Private Equity Round
$2.5B
May 3, 2021
Solid Power
Series B
$130M
Oct 13, 2020
Solid Power
Series A
$28M
Jun 19, 2020
Motorq
Series A
$7.3M
Apr 2, 2020
Phantom AI
Series A
$22M
Dec 23, 2019
Rivian
Private Equity Round
$1.3B
Oct 29, 2019
Cellink
Series B
$22.5M
Apr 24, 2019
Rivian
Corporate Round
$500M
Nov 7, 2018
SAIPS
Corporate Round
$12.5M
Mar 19, 2018
Desktop Metal
Series D
$65M
Ford – Growth
Year
Amount
Percentage Increase/Decrease from last year
2022
$151.736B
+12.72%
2021
$136.433B
+4.63%
2020
$127.144B
-18.45%
2019
$155.9B
-2.77%
2018
$160.338B
+2.27%
Ford – Competitors
General Motors Company (GM), Honda Motor Company (HMC), Toyota Motor (TM), Daimler (DDAIF), Tesla Motors (TSLA), Navistar International (NAV), and Spartan Motors (SPAR) are Ford’s main competitors.
In 2022, Ford Motor Company received two awards, and 6 awards in 2021. Ford Motor Company took home the awards for Best Engineering Team 2022 and Best Global Culture 2022.
Other recent awards are as follows:
Best Company for Diversity 2021
Best CEO 2021
Best Company Culture 2021
Best Company Happiness 2021
Best Leadership Teams 2021
Best CEOs for Diversity 2021
Car of the Year 2019 – Finland
Car of the Year 2019 – Croatia
Belgian Family Car of the Year (two price categories) – Belgium
Irish Car of the Year awards: Small/Compact Car of the Year – Ireland
Autobild Golden Wheels Award: Best Compact car – Bulgaria
BusinessCar Awards: Best Lower-Medium Car – U.K.
Parkers New Car Awards 2019: Best Small Family Car – U.K.
2018 Scottish Car of the Year Awards: Best Family Car – Scotland
Auto Zeitung Auto Trophy 2018: Compact category winner – Germany
Great Austrian Automobile Prize: Start category winner – Austria
In the face of an auto sector destabilized by increased rivalry, uncertainty, and technological innovation, Ford has launched a “global redesign” to become more nimble and less bureaucratic. According to Ford CEO Jim Hackett, this revamps promises to save $14 billion in expenses by 2024.
Cutbacks Ford eliminated about 3,000 of its paid workforce in the U.S., Canada, and India. The company was looking to lay off as many as 8,000 positions in a move to shift its focus to electric vehicles. Ford promotes the layoffs as part of its new, creative approach, but others view them as a last-ditch cost-cutting move.
Ford stated in January 2021 that it would devote 90% of its worldwide capital allocation through 2023 to a shift to trucks, SUVs, and commercial vehicles. This means that Ford will phase out sedans and other compact automobiles during the next four years.
Self-driving cars Ford is expanding its investment in self-driving cars, as shown by its Mobility business unit. This is undoubtedly a forward-thinking move on Ford’s side, but breakthrough autonomous cars are unlikely to arrive fast enough to provide the benefit Ford requires. Ford is developing its first fully self-driving car, with a cost of $2.7 billion.
Electric and Hybrid Vehicles Ford announced intentions to invest $11 billion in electric vehicles in January 2018, much above its prior aim of $4.5 billion. By 2022, the firm hoped to have 40 electric cars on the road thanks to this investment. The rest would be plug-in hybrids, with 16 being entirely electric.
Ford has established itself as the second electric vehicle company in the US after Tesla. Since the Mustang Mach-E model debuted in late 2020, Ford has produced 150,000 of them. It intends to build 600,000 by 2023 and over 2 million EVs annually by 2026.
Conclusion
Ford is a well-established American automotive company known for producing a wide range of vehicles, including cars, trucks, and SUVs. With a history of innovation and a commitment to quality and durability, Ford has built a loyal customer base and remains a major player in the global automotive industry.
FAQs
What does Ford do?
Ford Motor Company is an American automaker that designs, manufactures, distributes, and serves a wide range of Ford trucks, SUVs, automobiles, and Lincoln luxury vehicles.
When was Ford founded?
In 1903 Henry Ford, an American automobile manufacturer established the Ford Motor Company.
Who founded Ford?
Henry Ford established the Ford Motor Company in 1903.
Which companies does Ford compete with?
General Motors Company (GM), Honda Motor Company (HMC), Toyota Motor (TM), Daimler (DDAIF), Tesla Motors (TSLA), Navistar International (NAV), and Spartan Motors (SPAR) are Ford’s main competitors.
Ford company belongs to which country?
Ford is an American based in Dearborn, Michigan, U.S.
The Indian automotive industry was left with even fewer brands as Ford Motors departed from the Indian markets on Friday. The motor giant had announced its decision to shut down all local manufacturing facilities on Thursday.
The unpleasant news meant worse for car dealers and the company’s employees as this would affect them in the long run. The manufacturing plants will continue to operate until 2022 for the sole purpose of manufacturing export vehicles. This means their models for the Indian Market such as Figo, Aspire, Freestyle, EcoSport, and Endeavour will no longer be produced.
For those who have kept track of the auto market, this shouldn’t be something too surprising. Ford is the most recent automotive brand to leave the Indian markets as we’ve seen with Harley Davidson, Chevrolet, and Fiat before. Did all these brands leave for the same reasons or did each of them have their own barriers that stopped them? We’ll take a deeper look into what drove Ford Motors to make this difficult decision.
Ford’s been in the Indian market since 1995, although the company had begun its initial days back in 1926, it had come to halt due to severe import restrictions enacted at the time.
Ford had resurfaced as Mahindra Ford India Limited (MFIL) a joint venture with Mahindra & Mahindra Limited. The company was then renamed to Ford India Private Limited. Further down the lane, we got to see some of the most iconic cars released by Ford such as the Ikon and Mondeo Mk3.
There are a few reasons that have contributed to the company’s decision to stop dealing in the Indian market. The decision was bold and calculated to ensure the long-term profitability and sustainability of the company.
Poor Sales Conditions
Consumers have always loved Ford but the Indian auto industry as a whole is going downhill. This is rather something to do with how the market is performing and isn’t specific to the brand.
People have a variety of options available in the market and this has reduced the company’s demand in the Indian market over the years. It’s rather clear from the numbers that the company wasn’t getting any better in terms of market share over the years.
Ford has lost more than $2 billion over the last 10 years in India. Although models such as the EcoSport had sufficient sales, it wasn’t enough to be considered profitable for the company. Based on how the company operates in India, it’s worth considering the $0.8 billion spent in 2019 just for operations.
Ford has tried to incorporate global standards for its manufacturing plants and operations alike. These may have been a little too expensive for the country and cost them more money than the potential profits.
The tie-up between Ford Motors and Mahindra has allowed the company to produce new cars faster and with less investments in the past. The joint venture formed in October, 2019 meant Mahindra was owning a 51 percent controlling stake and Ford owning a 49 percent stake.
The marvel of modern technology allowed us to do a joint press conference alongside Bill Ford, Chairman & Jim Hackett, CEO of Ford Motor. Of course, tech couldn't solve the time zone challenge so a big thank you to Bill & Jim for trekking to office in Detroit so early! https://t.co/8kFaMOTrIR
The companies were to cooperate specifically for the co-development of 3 new SUVs and an electric vehicle. But this was not to be, as the partnership was called off in December, 2021. The reasons for this were apparently in the best interests of both companies although there is no official statement.
Ford’s joint venture with Mahindra & Mahindra in October 2019
This also means that the upgraded version of Ford’s EcoSport which was to feature Mahindra’s 1.2-liter direct-injection turbo-petrol engine will not be released later this year. The declining sales meant that Ford was relying on the partnership as well as the new SUVs to keep them afloat. The formal end of the joint venture has left the company in a rather difficult position.
The company was forced to make a choice that would have a deep impact on its future profits. Ford makes more money in other countries like the United States where it’s still able to get sales and keep pushing more expensive cars to consumers.
To those of you who might be wondering if this is the end game for the company, it certainly isn’t. Ford Motors isn’t leaving India, rather it has put a stop to all manufacturing of local vehicles. The manufacturing plants in Chennai (Tamil Nadu) and Sanand (Gujarat) will be shut down in a phased manner. As of right now, these will still be used to manufacture export vehicles and parts.
Ford has always provided great customer support. The company promises to keep providing existing owners with the same care and support regardless of their decision. As mentioned by Anurag Mehrotra, president of Ford India, car owners will still have access to spare parts and services through local dealers and customer support if it’s needed for any reason.
As per the company, service will be provided to Ford owners all across India
As for resales, you might not get as much value as expected. This is the same for any motor brand that isn’t operational in the country anymore. While this is true, cars like the EcoSport are still a good buy if you aren’t too paranoid about the resale value and just want a great car at an affordable price. Service and parts will be provided by Ford as previously mentioned, meaning that getting a Ford car in 2021 can be a satisfying deal if you choose to.
Ford still plans to serve the Indian market in the form of global imports. Popular global models such as the Ford Mustang will be available to consumers in the form of imports. This just goes to show how desperate the company is to stay operational in the country and how the decision was made purely to ensure the sustainable future of the motor manufacturer. Ford had tried reaching out to multiple manufacturers trying to ensure another joint venture but unfortunately, none have worked out for varying reasons.
Ford’s recent move isn’t very pleasant considering the 4,000 employees who just lost their job. Regardless, the company has made its mind and taken a decision that will aid their benefits. Ford plans to bring more international cars to India and we’ll have to wait and see how things turn out.
The Indian automotive industry and car enthusiasts alike are sure to miss the brand. But as things are in motion the best we can do is watch out for some great deals for used cars and hope that Ford Motors stays on Indian grounds in the future.
FAQ
Why is Ford shutting down its manufacturing plants?
Ford is shutting down its operations in India as it has lost more than $2 billion over the last 10 years in India.
Is Ford Leaving India?
No, Ford will shut down its manufacturing plants but Ford owners will still have access to spare parts and services through local dealers.
Will Ford support the existing customers?
Yes, as mentioned by Anurag Mehrotra, president of Ford India, car owners will still have access to spare parts and services through local dealers and customer support if it’s needed for any reason.
Ford Motor Company is well-known. This automobile company has been around for over 116 years, creating iconic cars and even aircraft and armored vehicles during World War I & II.
Many of the companies that were founded in the early 1900s have gone on to become some of the most influential companies in the world today. And, Ford was one of the most important companies that stood out from the crowd.
Many of Ford Motor Company’s innovations have left their mark on the auto industry throughout its 115-year history. Ford is one of those companies whose name is well-known to everyone. With a rich history as one of the world’s oldest car manufacturers, Ford has many interesting facts that you may not be aware of!
Detroit, Michigan’s Ford Motor Company was founded in 1903. Henry Ford and his son Edsel were among the 12 founders. For him, it was all about raising money for his business to succeed. However, Henry’s stake in the company would not last.
Henry and Edsel Ford bought out the other 10 owners of Ford Motor Company in 1919, allowing them to take full control of the company that bears their names. Detroit’s Mack Avenue was the site of the first Ford plant.
The Quadricycle
Ford Quadricycle
Henry Ford’s first vehicle was the Ford Quadricycle. It was a simple frame with a gasoline engine and four bicycle wheels mounted on it that was Ford’s first automobile. This quadricycle was completed in 1896. He built a 4-wheeled quadricycle with a tiller, a gas-powered 4-horsepower engine, and a transmission.
Henry Ford worked as Thomas Edison’s chief electrical engineer In his spare time, he built the quadricycle. After reading an article in the November 1895 issue, he became interested in the subject.
Thomas Edison’s Last breath
Thomas Edison’s Last Breath
Despite their world-changing achievements, Thomas Edison and Henry Ford’s genuine friendship is a delightful tale that few people have heard. Two of the men bought vacation homes in Fort Myers, Florida, because of their lifelong friendship.
The last breath of Thomas Edison was captured in a test tube and sealed with a cork, at Ford’s request. To Henry Ford, Edison’s “life and breath” remained in the tube. Friendship was very important to them.
Fordlandia
Fordlandia
The Amazonian jungle of Brazil was the site of Henry Ford’s 1928 attempt to create a small “utopian”-style village. This plantation was to serve multiple purposes and be the size of a small village. While providing fresh rubber to his factories, it would also provide jobs for the locals.
In the end, setting up the village proved to be much more difficult than he had anticipated. It ended up being a failure, and the land on which it was built is still uninhabited.
Ford is credited with inventing the assembly line for making automobiles. This method of car construction was pioneered by Henry Ford, and it is still the most popular method of car construction today!
Productivity skyrocketed as a result. A car could be built in less than 90 minutes, instead of the 700 minutes, it took before. The company’s profits soared as a result. Ford’s involvement was evident at every stage of the production process. A good business decision at the time, it turned out to be a world-changing innovation.
Pay increase
In 1914, the average factory worker earned $2.50 per day. Henry Ford increased the pay of his employees to $5 a day in 1914, which was unheard of at the time. For Ford and its workers, it was a wise move. It was a move that resulted in a positive atmosphere among employees. Their productivity went up as a result of this, as did their wages, which enabled them to buy a car that they helped to build.
As a result of the new salary, a shorter working day, and profit-sharing, employee turnover was reduced, and the middle class and fair wages movements grew.
Ford Mustang was transported to the Top of Empire Estate building
Ford Mustang at the Top of Empire State Building
Ford Mustang was disassembled and photographed from a helicopter after it was transported in four pieces using resident elevators to the Empire State Building in 1965.
After being separated into four pieces and transported up using the elevators on-site, the car was finally delivered to its destination. Reassembled, the car remained there for five months before being dismantled.
Jim Morrison owned only one car, a Ford
Jim Morrison with his Shelby Gt500
The Doors are one of the most well-known rock bands in music history, with a worldwide fan base. Jim Morrison was the band’s lead singer, and he became an inspiration to many musicians of that era and subsequent generations.
It was a 1967 Shelby GT 500 that Jim Morrison, the legendary Doors singer owned.
It is one of the most famous Mustang models ever made. After suffering a heart attack in Paris in 1971, Jim Morrison passed away at the age of just 27. He’s buried in Paris, and his gravesite is still one of the city’s most popular tourist attractions.
Ford Motor Company began manufacturing airplanes during World War I. During the “war to end all wars,” he wanted to lend a hand to the United States military. Throughout his life, Ford held 161 patents, proving that he was constantly innovating and expanding his reach.
“Tin Goose” is the nickname given to the Ford Trimotor, a three-engine American transport aircraft. Henry Ford’s company began production in 1925 and ended on June 7, 1933. Ford produced 199 Trimotors. However, it was also used by military units. Unfortunately, he had to shut down the operation in 1933 due to a lack of success.
Ford’s Racing clan
Ford 24 Hour Le Mans
During the 24 Hours of Le Mans race, Ford beat Porsche, Lamborghini, and Ferrari. With its GT40, Ford ended Ferrari’s six-year winning streak in 1966. Ford went on to win the championship four years in a row, which is noteworthy.
FAQ
Who is the founder of Ford?
Henry Ford founded Ford Motor Company on 16 June, 1903.
What was the first car made by Ford?
Ford Model A was the first car made by Ford in 1903.
What was the net worth of Henry Ford?
Henry Ford had a net worth worth equal to $200 billion dollars adjusted for inflation.
Tesla, the electric vehicle manufacturer of Elon Musk, is set to start selling its base model in India in the near future. While many of its fans in India were jubilant about Tesla’s entry, capturing the market can be the most daunting challenge the company has had until now. A Bloomberg article notes that Elon Musk is negotiating the opening of showrooms and possibly a factory with other Indian states Galuru branch. In India less than 1% of vehicles sold are electric vehicles, according to the Bloomberg report. The launch of Tesla’s business in India will pose a significant challenge for the company. Let’s have a look at the Challenges and Difficulties Tesla might face in India.
Elon Musk’s clean energy and electric vehicle company Tesla will start operations in India early next year, confirmed Union Minister for Road Transport and Highways Nitin Gadkari.
Tesla is initially expected to sell its vehicles in India, and Tesla would also look at setting up a manufacturing facility at a later stage depending on demand, Gadkari told The Times of India. At a recent media event, Gadkari said there is focus on developing electric cars and added that a lot of Indian firms are also looking at developing electric cars. Ultimately, Tesla ended up setting up its unit in Bengaluru.
India announces steps to improve the country’s Electronics sales but they may not be sufficient to increase the sales of Tesla’s costly EVs. In 2015, India launched the Faster Adoption and Development of Hybrid and Electronic vehicle (FAME), which includes a INR 900 crore pledge to subsidies for electric tricycles for busses, as per the International Energy Agency, with a Faster Adoption and Development of Hybrid and Electronic vehicle (FAME). Another FAME program with INR 10,000 Crore was launched in 2019 to enable people to buy electricity supplies and build charging infrastructure. In addition, by August 2019, the government has reduced the Goods and Services Tax GST on electricity vehicles to 5 percent.
The tax rates for cars in India are one of the highest in the world. This includes a 28% Goods and Services Tax (GST) and charges ranging from 3% to 22%. Though subsidies for electric cars exist in places like New Delhi, they are not sufficient for more people to afford Tesla’s cars. High taxes deter demand, and thus the attractiveness of economies of scale to consumers is reduced for manufacturers. For international brands, that was disastrous. Toyota announced last month that further growth in India will be stopped due to high taxes. Harley Davidson’s decision to leave the market recently was allegedly attributed to higher taxes. Last year, Ford announced its move to a joint enterprise for the most part of its assets. So, it will be challenging for Tesla because big companies are pulling out because of higher taxes.
In India, Tesla’s greater challenge is pricing. Given that Tesla’s costly bids would not be eligible for EV subsidies in this region, Bloomberg New Energy Finance (BnEF) Analyst Allen Tom Abraham told Bloomberg that the top limit for EVs in India to eligible for subsidies is INR 15 lakh. It is worth noting that Tesla Mode l3, built in China, is started at 2,65,740 yuan or almost $41,000. The cost of crossing Model Y from Shanghai begins with 339,900 yuan. In addition to the price the export prices and charges on the Tesla cars will not be met for the majority of customers when they arrive in India.
It is about half that of China’s average prices and just 25% of USA’s average vehicle prices. This suggests that Tesla’s cheapest car in India will attract just around 1% of the market, says Abraham. Tesla would therefore have a marginal sales volume in India. While Tesla is facing challenges, India’s demand for electricity is now at a rising stage and, according to a study conducted by Council of Energy, Environment and Water (CEEW) for Energy Finance, Energy value in India could reach up to $206 billion in the next decadence. If it is to succeed, Tesla must keep its commitment to India. This is not the first time that Tesla CEO Elon Musk promises to visit India, as most musk watchers know.
Tesla would open its Model 3 vehicle pre-bookings, and deliveries would take place later this year. In India, the other Tesla models will be Model X, Model S, and Model Y, with approximate prices of INR 2 crore, 1.5 crore, and 50 lakh respectively. There is no chance of the business working with dealer companies in order to sell their vehicle. Potential buyers should note that while Model 3 is one of the more affordable cars in Tesla, it is not cheap to get to India, since it will be fully-built (CBU) cars with a high import duty. Although the prices are not confirmed, reports show that Tesla Model 3 could cost INR 55 lakh in India.
As of April 2021, they are not. But Tesla has already set up its unit in Bengaluru so it is assumed that they will be made available very soon.
Where has Tesla set up its Units in India?
Tesla has set up its unit in Bengaluru, India.
What will be the prices of Tesla in India?
It is expected that the pricing for Tesla in India will start from INR 55 Lakhs.
Why is Tesla so expensive?
Tesla’s cost more than average cars due to its use of cleaner energy sources and it’s advanced technologies. In India, other than import taxes they will also not be eligible for EV subsidiaries in India. This would be a challenge for Tesla.
Which Tesla car is coming to India?
Tesla Model 3, Model Y, Model S, Model X with approximate prices of INR 55 lakh, 50 lakh, 1.5 crore and 2 crore respectively.
The global automotive and tech industries are on the edge as a wave of a supply shortage of semiconductors has hit them hard and how. Computer chips manage or probably run almost everything under the sun.
From nuclear plants to the internet cables, stabilizing suspension systems, and regulating engine temperatures, we need them more than ever since technology surrounds us in a way that we are yet to comprehend.
Computer chips are almost everywhere, in the cars we drive, in the smartphones we use, in devices like refrigerators, laptops, television sets, etc. We can’t imagine our lives without these. The shortage of these chips has turned down a few economies and soared for a few others around the globe.
Semiconductors or chips as we commonly know them are basic structures used for encrypting logic and memory functions in automobiles, phones, laptops, and gaming devices. Semiconductors are integrated or electronic circuits printed on conducting materials, the most common being silicon. They are the basic building blocks for making computers and running software.
Over the decades, developers have managed to squeeze more circuits into tinier circuits making our computers and devices smaller and cheaper. The semiconductor fabrication is based on several transistors, the smallest part of the chip’s electronic component, per square millimeter. The factories or facilities that produce semiconductors are known as “Fabs”.
The most advanced Fabs are known for semiconductors that measure 5 nanometers. That’s a millionth of a millimeter. Smaller the semiconductor, the higher the transistor count per square millimeter. The most highly functioning semiconductors are ones having a density of 100 transistors per square millimeter.
Scarcity of Semiconductors around the Globe
A chain reaction was set off when the pandemic hit us. As governments around the world imposed strict lockdowns, the demands for automobiles took a sharp U-turn. The automobile industry is one of the largest consumers of electronic chips as cars are turning into devices with power windows, machine control, and other features that use Artificial Intelligence. All these functions are integrated through semiconductors.
Automakers like General Motors and Ford shut down several plants due to a decline in demand and production was brought to a halt. The sales fell drastically and companies cut short on their purchases of semiconductors.
While the pandemic forced us to stay at home the need for indoor entertainment rose substantially. This resulted in an increased demand for tablets, smartphones, and laptops worldwide. The ripple effect called upon a higher demand for semiconductors in the tech industry. Tech companies began roping in more chips and some even stacked a few envisioning the shifts in the global demand.
The market recovered at a better pace than anticipated and the demand for the auto making companies started to re-surface. Meanwhile, the tech industry gorged up 70% of the semiconductors being produced and left the automakers high and dry.
The USA is the largest producer of semiconductors in the world. Due to reforms implied by former President Donald Trump, the USA severed ties with Chinese companies and limited the chip sales export to China. China stockpiled chips and other countries followed suit.
The American break up with Chinese companies turned the demand wave to TSMC, Taiwan Semiconductor Manufacturing Company, and other East Asian companies. TSMC and Samsung created a monopoly over the production of semiconductors which add up to 70% of the total production.
America’s semiconductor production has plummeted to 12% from 37% since 1990. Consecutive changes in political leaders and bare minimum funds have discouraged the overall production.
Other factors that catered to the scarcity were a huge fire in a Japanese chip factory in October 2020 and a cold snap that withered two semiconductor factories in Texas.
The TSMC and other east Asian companies are working under extreme pressure to meet the demand worldwide. It might sound exuberant for the company, but it is far from what reality is.
One might wonder why can’t more Fabs be built in order to sustain the demand. Fabs have peculiar prerequisites such as temperature-controlled environments, dust control, highly volatile pieces of equipment, and a minimum of five years of time to get it ready for production.
Not to mention the sky-high cost requirement for setting up a Fab. No wonder the largest producer of chips America, is far from its competitors lacking the funds and support from its government.
Reportedly, the demand has rocketed due to the requirement of semiconductors in the production of 5Gsmartphones. Every advancement in the electronic industry is largely based on the exploitation of semiconductors. As the world gets 5G ready, companies have massive supply demands for semiconductors.
Indian automakers depend largely on imports of semiconductors. The worldwide demand, too few supplying agencies, and the waiting period have the Indian automakers worried as they import electronic requirements totaling to Rs 3000 crore every year.
“The big concern for the auto industry and Mahindra, and in fact for the world, is the semiconductor shortage. (It is) something that we’re very perplexed with, and something where the end is not clearly known as to when this fall will go away,” Pawan Goenka, MD, and CEO of Mahindra & Mahindra, said during a press conference on the company’s Q3 results, on February 5.
During Tata Motors’ press conference on its Q3 results on January 29, PB Balaji, CFO, Tata Motors, said that up until January, there has been no impact on the company due to the shortage of semiconductors. “Having said that, the risks are real and conversations are happening with all tier-1 and tier-2 suppliers and with the semiconductors industry as well to ensure that supplies continue.
From a demand perspective, we are going very fast, and that’s also adding to the pressure that we have. This is something that is being managed on a live basis, and we will ensure that we do our best to minimize the impact.”
“This is a challenge, and you need a hell of a lot of firefighting to get through,” Balaji added.
What happens next
The shortage will entail a while longer as the USA finds solutions for the production and sale of semiconductors. The world waits as new policies are put in place and the trade resumes.
Chip companies might be benefitting from the new demand drive but this locks them up in a long-term deal which brings more pressure on production.
The biggest winners are companies such as California-based Applied Materials and Lam search and Japan-based Tokyo Electron who make the highly complex and expensive manufacturing equipment required to produce semiconductors.
FAQ
Why is there a shortage of computer chips?
The pandemic resulted in an increased demand for tablets, smartphones, and laptops worldwide. The ripple effect called upon a higher demand for semiconductors in the tech industry.
Where are most semiconductors manufactured?
Taiwan, South Korea and China are the countries where most semiconductors are manufactured.
Why are semiconductors so important?
Semiconductors are an essential component of electronic devices, , computing, healthcare, military systems, and transportation. In short Semiconductors are the Brains of Modern Electronics.
Conclusion
Companies around the world believe that the demand for chips will barely slow down. The share prices of TSMC and Samsung have grown over 190% and 61% respectively over the last few years, all thanks to the shortage of chips.
The automakers falling short of chips, need to take a long hard look at their supply chain management and cost-effective pricing as many automobile companies saw a hike in their products due to this scenario.
This might exhibit as a complex problem for bigger players in the global market but the end result is inflicted upon the consumer who is forced to pay a higher cost.
