File photo.
Berlin: US auto giant Ford announced plans Monday to give its German subsidiary a multi-billion-euro cash injection as it struggles amid sluggish demand for electric vehicles.
It said it will inject up to 4.4 billion euros ($4.77 billion) into the operation to help it pay down debt while also seeking to further trim production costs.
"To be successful in Europe in the long term, we must continue to simplify our structures, reduce costs and increase efficiency," said John Lawler, Ford's vice chair.
Ford has spent $2 billion converting a Cologne plant for the production of electric cars, but sales of the vehicles (EVs) in Europe have tailed off in the face of high up-front costs and sparse charging infrastructure.
In November last year Ford announced it was cutting 4,000 jobs in Europe, mostly in Germany, saying it was seeking to ensure the company's future competitiveness on the continent.
The slow EV transition is just one of the problems facing the crisis-hit auto industry in Europe, which is also battling high costs and increased competition in key markets like China.
Across the continent, new EV sales by volume fell 5.9 percent in 2024 versus 2023, according to the European Automobile Manufacturers Association, even as the total number of cars registered grew by 0.8 percent.
Patchy support from governments has contributed to the fall. The German government removed subsidies for EVs at the end of 2023, leading to heavy falls in sales.
Europe needs "a clear political agenda" to promote electric cars, Lawler said, particularly with automakers facing potentially hefty fines if they do not meet new EU emissions reduction targets.
"It is essential that all parties involved -- industry, political decision-makers, trade unions and social partners -- work together to secure the future of the European automotive industry," he said.
