On March 25-27, 2022, the China Electric Vehicle 100 Forum (2022) was officially held. With the theme of "Meeting the New Stage of Market-oriented Development of New Energy Vehicles", the conference conducted in-depth discussions on many challenges and opportunities such as the development of the new energy automobile industry, double carbon targets, climate change, supply chain adjustment, in-depth application of information technology and intelligent technology, change of human travel mode, competition and cooperation among major countries, etc.
At the new generation of automobile market and consumption forum held on the morning of the 27th with the theme of "Comprehensively Enhancing the Competitiveness of New Energy Vehicle Products with User Centricity", Ke Fuming, General Manager of Ford Motor (China) Electric Vehicle Division, delivered a speech around the theme, and the main views were as follows:
1. Seek a direct-to-user business and delivery model through the Ford Select City store in China;
2. Integrate different charging service providers into a network that now has nearly 500,000 charging piles in China;
3. As gasoline prices rise, the operational cost-effectiveness of pure electric vehicles will become more and more attractive.
The following is a transcript of the speech:
Hello everyone, friends of the Electric Vehicle 100 Forum, I am Ke Fuming, general manager of The Electric Vehicle Division of Ford Motor. Due to the COVID-19 pandemic, we were unable to meet in Beijing, but I am delighted to be able to bring a presentation today at a Ford City store in Shanghai.
I've been with Ford for over 30 years and have been working on pure electric vehicles for the past five years of my career. So, as I prepare for today's talk, I think of 2017 when I got together with a small group of people to discuss strategies to accelerate ford's all-electric vehicles. Let me make a brief summary to explain why we think the penetration of pure electric vehicles will rise worldwide.
When we came up with this plan, we expected the cost of pure electric vehicles to come down. First of all, with the passage of time, there will be more and more electric vehicles available to users, and users will have more choices, more models, and more brands. Second, the infrastructure will continue to improve. Charging has always been a top priority in people's minds, and consumers want to know how they charge their cars. Therefore, if the infrastructure is improved, the pain points will be reduced. Last but not least, education in the market will continue to improve. In early investigations, consumers were even worried about charging in the rain. As the penetration of pure electric vehicles rises, we believe that consumer awareness will continue to deepen. Overall, demand is growing faster.
In particular, I would like to mention that in the fourth quarter of last year, China sold more than 900,000 pure electric vehicles, and the share of the industry of electric vehicles reached almost 18% in December last year, which is very shocking. The electric vehicle market continues to grow globally, especially in China, and there has been a real shift in consumer perceptions of pure electric vehicles around the world.
In the early days of electric vehicle development, the main concern was on sustainability. A fundamental shift that we began to see a few years ago, pure electric vehicles are considered to have more advanced technology and design than other cars. So today's customers are different, their needs are different, they want beautiful designs, the best technology, this technology is not only a driving technology, around the internet technology, OTA over-the-air upgrade, we have observed this in markets around the world. These customers are also younger, they are switching to pure electric vehicles, they are looking for a different way to buy a car, and the direct sales model has followed the trend. These young customers, who are accustomed to shopping on mobile devices through online platforms, are also clearly more willing to buy cars online. Last but not least, around the world, the overall infrastructure around charging remains important, including excellent range and charging convenience.
Now, when we look back at Ford's plan, we follow the key principles and tenets set at the time. If anything, we've only picked up the pace in the last five years. In 2022, we will spend more than $5 billion on electric vehicles, double that of last year. But the core way we approach this business is not going to change.
First of all, we want to play to our strengths, such as the F-150 in the US truck market has been selling for more than 45 years. We will also cast our most iconic brand, Mustang. The Mustang brand enjoys widespread popularity around the world, including China, and we will further expand the influence of this brand through pure electric vehicles. Second, we also need to continue to scale up, and every new energy vehicle company is looking to scale up, because this will help us continue to have the most cost-effective products. Finally, we need to continue to iterate on our business model and respond to changes in the market.
When we talk about business model innovation, we can think about the differences of pure electric vehicles in many ways. The first is the product. Companies like Ford, which have a history of more than 100 years, often need 3-4 years to update products in the past, and complete a major innovation in 7 years. Today, the situation is completely different, the business model of the car is changing, whether through the way of interconnection technology or OTA over-the-air upgrade, pure electric vehicles need to evolve better every year. We can also consider thinking about business model innovation from the perspective of battery technology. What impressed me was that the speed of innovation in the field of batteries is very fast, and battery technology is constantly innovating, making products more cost-effective. We can also think about the way it is manufactured, and the physical space required to assemble pure electric vehicles is greatly reduced. Compared to traditional products, we can get more types of products from a pure electric platform. In China, what excites me the most is the customer journey, so we are piloting several new initiatives through the Ford Select City store in China, where we are looking for a direct-to-user business and delivery model. As a result, the work we do in China will lead Ford's global electric vehicle business and lead us to build better products for our users."
So on our first exclusive platform for pure electric vehicles, I couldn't find a better model than the Mustang. We know that users want great designs and exciting products, and the Ford Mustang Mach-E came into being. Of course, products have to be powerful, so I'm excited to see products from the first exclusive platform for electric vehicles recognized by Consumer Reports. Let me explain to my friends who are not familiar with this magazine, this magazine does not accept advertising, they have a very large independent testing agency to test the performance of cars. Earlier this year, the Ford Mustang Mach-E was number one in performance. So we're confident that this car not only has an exciting design, but it's also extraordinary.
When we started talking about our target customers in China, considering that they were buying an American brand in China, our marketing team called them "calm and stylish rebels" because our target customers were actually happy to take a slightly different path, which included opting for electric vehicles. We know these customers have the confidence to make their own decisions, they want to live every day exhilarating, they want to make their lives uninterrupted, which means they want to simplify their lives, like vehicles and charging to make their lives simple, they want to focus on great and exciting things, they don't want to be disturbed and other details, and they don't want to slow down.
In the face of this group of customers, we will present Ford's masterpieces with a new direct sales model. So we call this store The Ford City store, and these city stores only sell pure electric models. Our Ford City store model is very different. Our target customers are used to online shopping, so we want them to buy a product or service whether in store or through a small program. Whether in the store, on the computer or on the mobile phone, the products, services, prices, and processes they face are uniform. No matter where consumers buy a car, our promotional policies are consistent. We want the customer car buying process to be simple and straightforward, including order delivery, so whether you order a vehicle at home or go to a store, you all go into the same order system.
One of the businesses we've continued to build over the past few years is what we call the Always-On Always-on experience. We know that vehicles must be connected, and we want a seamless experience that even reaches the consumer before they buy a car. Part of our "Always Online Ways-on" experience is building communities, and you can join our communities even before you buy a car, so we're constantly building our WeChat mini programs to make it very simple. Even if they haven't bought our car yet, invite them to join us on our journey. In addition to that, through our app, we want to make sure that once you buy a car, you will get a good service and your car can be continuously updated through OTA over-the-air upgrades. We are placing increasing emphasis on this real-time, connected digital experience.
We know that our users like to turn at high speeds and feel the lateral G-force. So we designed a graphic that when you're in uninhibited mode, the graph changes depending on the vehicle's lateral G-force. Sometimes it's these little details that really make a difference.
We've created a little detail, the volume keys. In the process of co-creation with users, we found that users like to adjust the volume from time to time, so they like buttons that are easier to grab and hard. So at the beginning it was an engineering challenge: how do we put the volume keys into the central control interface of the 15.5-inch touchscreen? Our engineering team found a very unique solution, which users also liked, that is, a volume adjustment knob with touch screen function at the same time, all of which can be improved by OTA over-the-air upgrades.
On the next slide, we can see the overall reasons that make the Ford Music Mach-E unique. The first is the pleasure of driving. By offering different driving modes, users can enrich the driving experience in different ways. Uninhibited is our most exciting driving mode, allowing the driver to drive with a single pedal, which is very aggressive and fun for vehicle handling. At the same time, we also know that pure electric models also have the advantages that other users need, and sometimes users just want to cruise on the road and enjoy the tranquility. So when we turn the car to whisper mode, it's another driving experience, the vehicle becomes quiet and composed, whether it's steering or single-pedal driving mode, the vehicle's handling is very different.
Last but not least, we know that as gasoline prices rise, the operational cost-effectiveness of pure electric vehicles will become increasingly attractive.
I've mentioned the importance of charging and charging infrastructure many times today, so I'll talk about the range of pure electric vehicles and Ford's charging strategy at the end of today's speech.
Charging and infrastructure are the primary conditions for long battery life. So, I'm glad that the Ford Mustang Mach-E is certified by clTC for light driving in China and has a cruising range of 619 km. So, offering a long-range version of the model for customers on long-distance travel is a great way to give customers more confidence.
Now, in addition to that, we know that some users have the opportunity and ability to charge at home, so we provide them with a door-to-door installation of wall-mounted charging pile service when buying a car. I'm glad that our charging team got the highest experience score for installing the charging pile, and from the users, we got very good feedback on how perfect and seamless the installation experience was. We also know that users are very concerned about the car's current range, regardless of whether the car is charging or not, so through the mobile phone app, users can monitor the vehicle's current battery, charging situation, and mileage, which also means that we want users to see the most accurate mileage prediction when driving, so our team spends a lot of time to ensure that the remaining mileage is accurate.
Finally, I've always been interested in the approach taken by different companies to lay out their charging infrastructure, and in our early conversations with users, we found that none of the charging networks were perfect. Users want more options, and they want to easily find the nearest charging pile. So one of the things we've done is bring together different charging service providers into a network that now has nearly 500,000 charging piles in China, which means that Ford Mustang Mach-E users have access to one of the largest and most extensive charging networks in the country, making sure charging is close and convenient, and getting the details they need through a simple app.
I share here today, thank you for listening and understanding Ford's pure electric vehicle strategy and business in China, thank you for knowing our Ford Mustang Mach-E, I wish you and your families a safe ride through the epidemic, thank you again.
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