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Ford increases investment in electric cars, Internet services in China amid sales slowdown

The Ford Motor display at this year's Shanghai auto show is filled with sports utility vehicles and electric hybrid vehicles. Photo: NPR

Ford Motor will double down on its bet in China's automobile market, as the country is considering replacing gasoline powered cars with fully electric and plug-in hybrid vehicles.

The American carmaker has outlined a tremendous plan for China, the world's largest automobile market, where it is intended to introduce 50 new car models by 2025, fifteen of which will be either fully battery-powered cars or plug-in hybrid vehicles.

The China-focused plan indicates that Ford will place emphasis on the development of electric cars specially designed for China, whose government takes a dominating role in developing electric cars and wants to address the worrying pollution problems by asking automakers to raise the production ratio of new energy vehicles in the country.

In September, China's Ministry of Industry and Information Technology and four other government agencies jointly announced a policy for domestic and foreign traditional car manufacturers, which produce or import more than 30,000 cars a year, to have zero-emission vehicles occupy 10 percent of the new cars sales in 2019, and 12 percent in 2020.

Ford is now among a list of foreign automakers which have not released any new energy vehicles yet in the Chinese market, where electric car producers are heavily subsidized by the government. But a partnership that Ford forged with local automaker Zotye Automobile in August will help the American carmaker to meet the requirements of the September policy as soon as possible.

Ford and Zotye signed a memorandum of understanding to set up a 50-50 joint venture, which will build electric cars under a new brand. Zotye ranked ninth on a list of automakers selling the most new energy vehicles in China in October. The partnership came after Ford outlined its plans aimed at offering by 2025 fully electric and hybrid versions of 70 percent of its car models built in China with its local joint venture partner Changan Automobile.

Ford has predicted that the Chinese demand for the new energy vehicles would hit six million by 2025, two thirds of which would be fully electric cars.

Helped by the ambitious China-focused plan, Ford has set a growth target for the Chinese market, saying that it plans to grow its revenue in the country by 50 percent by 2025 compared with 2017.

On Monday, the Dearborn, Michigan-based automaker said that sales in China fell 8 percent in November from a year earlier, following a 5 percent decline in October. The sluggish sales figures have led to Ford falling behind its rivals in the world's largest automobile market.

Focus on mobile Internet services

Speaking in the Chinese city of Shanghai last week, Ford Chief Executive Officer Jim Hackett said that the company will also stay focused on developing Internet-connected cars over the next eight years, which is a part of the company's China-focused plan.

Just two days after Hackett's remarks in Shanghai, Ford signed a deal with China's e-commerce giant Alibaba Group to make Internet-connected cars. According to the three-year deal, the two companies will launch a series of collaborations in areas of cloud computing for big data analysis and digital marketing services. Ford will also depend on Alibaba's AliOS operating system to develop smart Internet-connected cars.

Media reports said that Ford and Alibaba were holding in-depth talks about connecting the Chinese company's cutting-edge technologies of cloud computing and artificial intelligence as well as its advanced car operating system with Ford-built vehicles.

Commenting on the partnership, Hackett said in a statement that working with Alibaba will help the company build on its vision for smart cars in a smart world to help revolutionize the mobility experiences of consumers, as customers' online and offline experiences are converging rapidly.

Previously, Hackett said that by the end of 2019 all the car models Ford builds and sells in China would be equipped with vehicle-mounted mobile Internet services.

Also, Ford is eyeing completely autonomous cars, even though Hackett, former head of Ford's smart mobility division, has delayed a previously released plan which said that a fully self-driving car, with no steering wheel and pedals, would be released by 2021.

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