Ford will only sell full-electric cars in Europe by 2030

Ford said it will sell only full-electric passenger cars in Europe by 2030 as part of a new growth strategy in the region.

The move will be supported by the company's strategic alliance with Volkswagen Group to use VW's MEB electric-car platform, Ford said in a statement on Wednesday.

Ford will invest $1 billion in a new electric vehicle manufacturing center at its factory in Cologne, Germany, as part of the electric-only transformation.

The automaker's first European-built, mass-market full-electric car will roll off the lines in Cologne starting in 2023, Ford said. The factory, which currently builds the Fiesta small hatchback, will have the potential to build a second full-electric vehicle. Ford will continue Fiesta production in parallel with the new EV before eventually going all-electric.

"We successfully restructured Ford of Europe and returned to profitability in the fourth quarter of 2020. Now we are charging into an all-electric future in Europe," Ford of Europe President Stuart Rowley said in the statement.

Rowley told Automotive News Europe last year that Ford's MEB-based electric cars will be "highly differentiated" from VW's ID range of battery-powered vehicles.

VW Group CEO Herbert Diess tweeted after Ford's announcement on Wednesday: "We are committed to supply best EV technology at competitive cost to contribute to make Ford Cologne a successful and sustainable Automotive Operation again. We are very happy to contribute."

As an interim step to becoming all-electric, Ford said all its passenger vehicles sold in Europe will have battery or plug-in hybrid drivetrains by mid-2026.

Ford said it will also "substantially electrify" its commercial vehicle range.

The company's commercial vehicle range in Europe will be full-electric or plug-in hybrid by 2024 and the company expects two-thirds of commercial van sales to be all-electric or plug-in hybrid by 2030. The company gave no date for the end of combustion engine availability in its vans.

Ford this year will begin sales of its Mach E electric SUV.

Ford needed help complying with Europe's CO2 limits last year because of a battery cell contamination issue that led to a recall of the plug-in hybrid version of its Kuga SUV. It reached a deal in October to pool its CO2 output with Volvo Cars.

Ford’s announcement comes after the UK, the automaker's biggest European market, said last year it would ban the sales of internal combustion engine passenger cars in 2030, although the British government has subsequently said it will allow sales of full-hybrid and plug-in hybrid vehicles to continue for a further five years.

In making the 2030 electric-only commitment, Ford becomes the biggest automaker operating in Europe to commit to ending sales of internal combustion engine passenger vehicles.

Jaguar Land Rover said on Monday that its Jaguar brand will become all-electric starting in 2025.

Bentley has said it will drop internal combustion engines from its cars by 2030 and switch its entire model range to full-electric vehicles.

Volvo CEO Hakan Samuelsson told the Financial Times Future of the Car Summit in December that he envisions the Swedish automaker becoming an electric-only brand by 2030.

As ambitious as Ford's plan is, it has less to lose in Europe after having substantially scaled back in the region. The company has taken more than $1 billion of structural costs out of its local operations the last two years, closing five factories, selling another and eliminating more than 10,000 jobs.

Ford's passenger vehicle sales in Europe fell 32 percent to 654,729 in 2020 for a 5.5 percent market share, according to industry association ACEA.

Ford of Europe's $414 million of earnings before interest and taxes in the fourth quarter was the company's best quarterly result more than four years.

Bloomberg contributed to this report