The automotive industry is more competitive and saturated than ever before because all countries have increased access to the modern world’s advanced technology. In a shocking twist that nobody could have seen coming, Ford and Renault announced a partnership to produce low-cost electric cars and vans for the European market.
Understanding the tactical planning behind Ford and Renault’s partnership
Ford’s headquarters is in the United States, whereas Renault’s headquarters is in France, so this would seem like an improbable partnership. Owing to globalization and the interconnectedness of the world, the corporations from two different parts of the world were able to find each other and reach a groundbreaking agreement.
The primary objective of the unprecedented collaboration is to manufacture two different Ford-branded electric vehicles based on the Ampere platform. In other words, Ford is relying on Renault’s platform to develop two cars. Renault possesses a wide range of EV assets, which will make the manufacturing process much easier.
Ford and Renault forge a partnership: Assessing the relevance of the timing
The partnership between these two powerhouses is inspiring for the entire automotive industry, but there are questions surrounding why it happened now. The simple answer is that both companies can benefit from each other’s resources through the partnership. However, a much more detailed analysis suggests that the collaboration occurred because both Ford and Renault were aware of their inability to become one of the leading companies in EV production, and so decided to unite.
Companies such as Tesla and BYD are at the forefront of EV production and are so dominant that the gap between them and the rest of the field is immeasurable. Thus, the partnership could be an attempt by both corporations to compete against the leading EV manufacturers by executing a project with an incredible surprise effect.
Why specifically low-cost electric cars and why the European market?
A growing concern in the EV industry is that cars are premium, making them solely affordable for high-income people. Thus, companies are attempting to get ahead of this issue by offering cheaper alternatives; for instance, Tesla recently introduced a budget-friendly Model 3 vehicle for the European market. Chinese companies have mastered the art of producing low-cost EVs that are lucrative or profitable in the European market, and competitors are attempting to copy that same strategy.
Ford is a corporation that has maintained relevance when it comes to ICE vehicle manufacturing, but struggled to adapt when EVs emerged. Hence, the partnership is a perfect opportunity for it to announce its presence in the EV realm.
The calm before the storm: When will the new vehicles enter the market?
Ford and Renault’s announcement of the partnership stirred a lot of conversation and created a great deal of anticipation from the public. However, the world might need to remain patient because reports suggest that the first two Ford cars will arrive in Europe in 2028. As these will be Ford vehicles, customers of the brand need not worry because it will maintain its usual identity despite being manufactured by Renault. It is essential to highlight that at this point, the collaboration is not a merging of the two companies but is solely an attempt to rely on each other’s resources. For Renault, this is yet another opportunity to reignite its previous attempts to enter the EV market.
One of the main questions that people wondered following the announcement was how long the partnership was expected to span. Perhaps both companies are waiting to see how successful the first release will be before committing to a long-term collaboration or even merging. All in all, the partnership appears to tick all the boxes on paper but is slightly risky. As companies like Zeekr are entering the European market, it is incumbent on competitors to develop ambitious projects so these two powerhouses deserve credit.
