How Ford will leverage America's 'can-do attitude' in Europe EV re-make

Ford has radically slimmed its combustion-engine passenger car range in Europe to prepare for local production of electric cars. This starts with the Explorer, which will be based on Volkswagen Group's MEB platform Later in the decade, Ford will add cars underpinned by the automaker's second-generation electric platform and made at its factory in Valencia, Spain. Martin Sanders, who oversees Ford's passenger car division in Europe, provided some hints about what to expect from the new EVs. He also shared why Ford will leverage key American attributes to win over European customers during a recent conversation with Automotive News Europe Correspondent Nick Gibbs.

Ford CEO Jim Farley has talked about a three-row, seven-seat SUV and a pickup on the second-generation EV platform. Will there be European-focused cars on that platform?

We are predominantly looking at global products, but of course in a dimension which is suitable for the European market and that can give us the required scale to fill factories in Europe.

What does that mean for minimum annual sales: 100,000 a year per model?

Below 100,000 a year you wouldn't build a factory. We are looking at a family of products built on that platform, predominantly global products. I don't want to rule out an EU-specific product, but we haven't figured that out yet. We are just in the discussion point of determining where we go.

The first cars using the new platform will arrive in the U.S. in 2025. What about Europe?

Not decided yet but Europe launches after the U.S.

Can that platform underpin compact cars and SUVs, such as a model about the size of the Kuga compact crossover?

It can make cars that appeal to a wide range of European customers in that kind of dimension bracket.

Jim Farley said Tesla and BYD are impossible to compete with on cost in the two-row, five-seat electric SUV category, which is presumably the segment you will be targeting. How will you take them on?

In the European market 70 percent of the volume is between 4300 mm and 4700 mm long. There are so many different body styles and there are so many product derivatives that I'm convinced we will find a way to position a vehicle that is sufficiently distinct.

Do you think Europe should make it more difficult for Chinese to sell their EVs here to head off their cost advantage, or should they approach it a different way?

We are a global company. And in general, we support free trade. We are an American company doing business in Europe. We're an American company doing business in China. But free trade also means that we need a level playing field for all competitors globally. I'm strongly convinced the moment the Chinese want to scale in Europe, they will also produce locally. And then I don't see why we should not be competitive with any other company.

How could Europe level that playing field?

The whole industry is moving from internal combustion to electric. One country is going faster and another country is taking a little bit more time. But the whole industry is moving into a different type of technology. This means there will be billions, possibly hundreds of billions of dollars invested in new assembly plants, in battery plants, in logistics, in chemistry, in recycling, to build the industrial foundation for this new technology, which will be the basis for all automotive going forward. So, we just have to make sure that Europe is attractive enough for companies to invest.

What is the best way to do that? Incentives?

Yes, incentives. We have to be competitive with other places in the world. We have to be competitive on energy prices. Electricity prices are a very, very big part of the business case for car manufacturing. Same goes for labor. I expect politicians to understand where we are competitive today, where are we not competitive, and what can we put in place to offset that disadvantage.

You want to leverage Ford's American brand image to market cars in Europe. What will that look like for the consumer?

It does not mean that all our products are going to be American, but some of the spirit of iconic products such as the Bronco, F-150 and Mustang will be visible in our products. Why shouldn't I use this to build a brand profile? Overall, European consumers have a very positive connection to America, to America's can-do attitude and to the freedom America represents. We are the only traditional American brand that is still doing business in Europe at scale. Of course, I have to have products that appeal to European customers in terms of design and features, but the flavor of the product design will be American.

Fiesta production ends this month and Ford has said the small car segment is no longer a priority. What would it take for you to re-enter the Fiesta and Focus markets?

We are looking into Fiesta as an exercise for the whole organization to understand what it would take to be competitive and make a profit with an electric small car. But smaller vehicles are smaller margin. We don't have the scale of the Volkswagen Group or Stellantis in Europe. Small vehicles like the Fiesta are not the heartland of Ford Motor Company. We have a global approach. Our first question is: How can we build products that work globally for Ford in North America, Europe and other parts of the world? This is the exercise we are doing now.

A similar One Ford approach was tried in the past, but the markets diversified. Where is the common ground?

There are many very successful global products that work in Asia, Europe and North America. They do not have to be exactly the same. It's easy to spin off a derivative for very limited investment to make it a little more suitable for a certain part of the world. That is clearly part of our plan. But we will not create a vehicle only for Europe. We will not create a platform, a new technology or a new top hat exclusively for Europe, because we need to scale globally to compete with the new guys who are global brands and who are creating a huge amount of scale. We have to make sure that we are using the scale opportunities we have within our company. That global platforms with a very limited geographical differentiation.

You have used the VW's scale advantage to springboard your EV push with the Explorer. Is that something you could do again, particularly if you wanted to get back into small cars?

I don't rule that out. Our first priority is to get our own platform and our own technology to Europe, because I really believe we are building a very, very competitive platform. But we have a very constructive and positive cooperation with Volkswagen, and we are possibly exploring opportunities to take that to the next level.

In the past manufacturers felt that they had to have a range of products, to satisfy everybody who came into their dealerships. Are those days gone?

It depends on what you want. If you want to be No. 1 in market share for whatever reason, then maybe you need a very broad portfolio and a vehicle for every corner of the market. But then the question is: What is the purpose of market share? For me, it's much more important to understand how we can make distinct products that only Ford can make. Products that are very clearly connected to the values of our brand with the design and the features consumers want in Europe. There may be some corners of the market that we are not playing in, and that is fine. We don't have to be everybody's darling, but we have to have the right vehicles in the right segments, with very distinct appeal for those customers who love us.

The UK has approved BlueCruise, your hands-off, eyes-on autopilot feature. When is the European Union going to do the same? Or will it have a country-by-country rollout?

Our plan is to get Germany certified next, and then all other European countries will follow the German homologation.

How long will that take?

It's close; weeks, a few months, maybe -- but not years -- because the technology is there. It's working, it's homologated for the UK. And the UK is not so different from the EU. It was designed for Europe. It's great that we are the first in Europe to have this hands-free, autonomous driving in the market. It's a sign of our strength in this sector, and indicative of what is coming.

When does the Explorer arrive and what will cost?

Customers deliveries will start next year. The first prototypes are rolling off the assembly line now. With the Fiesta discontinued at the plant, we have all the space we need for the Explorer and a second model, which is also coming next year. Directly below 45,000 euros is the starting point for the Explorer.

Does the Explorer have VW's operating system or is it a Ford system?

The background is Volkswagen technology, but the front end and everything that the customer touches and feels -- not only in terms of material but also in terms of software functionality and layout of the screen -- is Ford. When you get into an Explorer, it looks it looks much more like a Mustang Mach-E than anything else.

Where do you see EV sales going in Europe. Are you seeing a slowdown?

No, we don't see that. EV adoption is going according to our plan. We saw a little bit of a dip in the first few months, but this was just because of a pull-ahead effect into 2022 because of taxation. In Germany, for instance, a government grant was dropped early this year. But the market is recovering to the levels we expected. New BEV offerings and customer acceptance are clearly driving demand.

You were supply constrained for the Mach-E at the beginning of this year. Are things back to normal?

We have ramped up production at our plant in Mexico, so we are back to normal supply levels.

When does the Mach-E variant with a lithium iron phosphate (LFP) battery arrive?

Second half of the year.

Are you going to create a cheaper, decontented Mach-E for the LFP version?

We have not decided, but it will not be a really decontented, much cheaper version because the Mustang Mach-E is our iconic electric vehicle. It sits at the top of what will be an entire portfolio of electric vehicles.

You rolled out the agency model in the Netherlands earlier this year to pilot a direct sales approach for Europe. How is it going?

In terms of process everything is working. There are a couple of things we have to iron out, but we are getting ready for the rollout into the next country.

Some automakers are having trouble generating as many sales leads as their dealers did under the traditional sales model. How is Ford doing in this area?

We are very happy with our lead generation. What is great now is to have full visibility of the whole funnel. Now we see everything from the first inquiry all the way to the sale. In the past, there was always a break somewhere. We passed the lead on to the dealer; it went into the dealer management system and we could not really connect the dots. Now we have full visibility. We can optimize the overall process. We can use the data much more efficiently. We can be much more scientific in spending our marketing dollars and change the way we message certain offerings because we immediately see in numbers all the way through the funnel.