Zac Quinn 
Ford Motor Company has projected some serious growth in earnings in the future. We’ve seen the start of this with the extra work being done to improve the quality of products, which should reduce the number of recalls Ford makes, saving a massive amount of money. But it seems other areas where profit margins will be improved is through the next generation of the F-150.
Next-Generation Ford F-150 Part Reduction: Details
According to CNBC, The company expects to simplify its operations and increase margins from traditional products to low double-digit EBIT margins, up from 7.2% in 2022. For example, Ford recently stated that it had removed over 2,400 parts from its next-generation F-150 compared with the current vehicle. To reduce confusion, that doesn’t include the refresh of the 14th generation of the pickup spotted traversing the roads over the past few weeks. This number pertains to the 15th generation of the F-150, which is a good couple of years from its unveiling.
Will that mean that the next generation of the Ford F-150 will be easier to fix if something breaks due to the massive reduction in parts? Possibly, but only time will tell what that means; the goal is to reduce production costs and improve product quality to increase profit margins. Kumar Galhotra, president of operations, stated that eight percentage points of margin are expected to come from a reduction in structural and controlled costs. That will assist in offsetting six percentage points in net pricing.
It turns out that profitably balancing the shift from traditional vehicles with engines to EVs is an increasingly difficult challenge for traditional automakers such as Ford. It’s already clear that the price of EVs is only expected to increase amidst the ever-growing reduction in materials, specifically lithium. By saving money where the company can with future products, it should make EVs more affordable for customers in the future and reduce the need to rely on government tax incentives. We’re still all about hydrogen power, though. Come on, science!
