The company recently announced a dedicated electrification team within Ford, focused exclusively on creating an ecosystem of products and services for electric vehicles and the unique opportunities they provide.
In a presentation to investors, Ford copped to having fallen short of a goal to earn an 8% profit margin with its automotive operations and reinforced that this remains its long-term goal.
"In the past few years, Ford simply hasn't had a compelling narrative that investors could latch onto", Barclay's analyst Brian Johnson wrote in a recent note to investors.
Other automakers have cautioned that shifting to all-electric vehicles might damage profit margins. It will also reduce its investment in internal combustion engines by a third, compounding with its existing investment of $4.5 billion in EVs and hybrids.
Hackett, former CEO of office furniture maker Steelcase Inc, took the top post at Ford in May after his predecessor Mark Fields was pushed out.
On Tuesday, new CEO Jim Hackett presented a few elements of his own vision for the company in what was effectively a 100-day update.
Hackett and other Ford executives believe that the savings would not be noticeable in the account details of Ford initially but will show up by 2019 and 2020.More news: Nobel physics prize awarded to 3 United States scientists
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Ford stock closed at $12.34 Tuesday, up 2%. Nevertheless, since July 2014 Ford's share price is low by 30 %. Hackett also wants to reallocate $7 billion of capital funds from Ford's cars to SUVs and trucks, including the new Ranger and Bronco. In the meantime, Ford Motors also announced the creation of "Team Edison", meant to accelerate the company's EV development and partnership work.
Ford is playing catch up in some areas. By 2019, 100 percent of Ford's new US vehicles will be built with connectivity. The company will target $4 billion in product engineering and $10 billion in material costs.
"Almost every long-lived company felt that ... and we're no exception", said Hackett.
This reiterates Ford's pledge that it will introduce 13 new electric models, including hybrid versions of the F-150 pickup and Mustang, in the next five years.
Ford is looking to build sustainably profitable BEV (battery electric vehicle) business in segments where we have a strong revenue presence, Jim Farley, head of global markets, told investors.
President of Global Operations, Joe Hinrichs said that the making of electric vehicles needs less monetary investment and 30 % decreased labor hours on each auto.
The news comes after General Motors announced that it would be manufacturing at least 20 electric cars between now and 2023. Ford can differentiate itself by offering, say, connected commercial vans that help small businesses keep track of their deliveries.