Ford has to partner with other car makers “to compete" in Europe

Ford has to partner with other car makers “in order to compete” in Europe, new European boss Jim Baumbick has said.

The American company announced on Tuesday that it had signed a letter of intent with the Renault Group to produce two “affordable” electric cars for Europe on the highly scalable Ampr EV platform.

The first of these new Ford models will arrive in early 2028 and is expected to be a Fiesta successor based on the Renault 5. 

Baumbick explained that the key reason for partnering with Renault was down to “very competitive cost and scale”. “Partnerships are a critical part of our business,” he said. “In order to compete at the level of cost, we need to ensure that we're getting scale and getting to new levels of material cost and leveraging the supply chain.”

“So when I look at our Ford model programmes that we're developing, we're taking thousands of dollars of cost out through design efficiency, supply chain, different supply chain evolutions and footprints, as well as efficiencies of our execution. But you cannot replace scale, and that's where Renault enters.”

The announcement suggested Ford’s long-standing relationship with the Volkswagen Group could be in doubt. The Ford Explorer and Capri SUVs, both launched last year, are based on the German firm's MEB EV platform and use extensive amounts of Volkswagen parts.

But Baumbick said the Renault tie-up “is a complement to an existing really great relationship with VW” and “I see that as certainly ongoing and something that we're thinking about for the long term, as we did from day one”.

“It is not a pivot away from VW; we have a very clear engagement and strategy with Volkswagen,” he continued. “We looked at a wide range of possibilities to compete in the small EV segment and, given the speed, agility and competitiveness, the Renault Ampr platform is the right choice for us.”

Asked whether the new affordable EVs plan was acknowledgement from Ford that leading its European EV offensive with these large SUVs – which were perceived to offer higher margins than smaller models – was a mistake, Baumbick said: “I would just say that as a company, and probably as an industry, everybody has learned a lot in this first round of EV investments, and as we go into our next round of product investment, that's what I'm most excited about. 

“Ford is making a commitment to really fortify our future in Europe. We are committed to manufacturing and building cars in Europe for Europeans, designed by Europeans.”