Ford creates team to ramp up electric vehicle development

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The stock is up 1.7% this year, trailing Ford's USA peers and the benchmark Standard & Poor's 500 Index. Since Hackett became CEO, Ford has said it will move USA production of the next-generation Focus to China and announced a partnership with Mahindra in India to bolster Ford's business there. He further added that the major investment chunk would be shifted from sedan and combustion engines towards the development of electric and hybrid cars and trucks.

"When you're a long-lived company that has had success over multiple decades the decision to change is not easy - culturally or operationally", Hackett said in a statement.

Fewer combinations and new tools will help Ford reduce new vehicle development by 20%, the company said Tuesday.

When Hackett was appointed, he carried out a 100-day review to assess the firm's strategy.

"The world's impression of Ford is that they are behind on a lot of these technologies", Emmanuel Rosner, an analyst with Guggenheim Partners, said in an interview.

The Detroit manufacturer has said it will shift $7 billion worth of resources from traditional cars to the SUV and pick-up markets, with particular emphasis on the 2018 North America Ranger and the worldwide launch of the new Bronco in 2020.

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Hackett realigned executive ranks during his first few weeks into a more rational flowchart. This Tuesday a 2.1 % rise has been reported in Ford's shares along with other automotive stocks. Jim Hackett, CEO Ford recently announced to investors that Ford intends to slit the costs of $14 billion in the following 5 years.

Ford said it was reaffirming its long-term goal of an 8 percent automotive operating margin as it looks to boost profitability. Ford had already promised 13 new electric or hybrid vehicles within the next five years.

Tesla has been ahead of the curve when it comes to fielding electric autos, but Ford seems to be confident that its global prominence will help it compete.

On Monday, General Motors unveiled plans to roll out 20 new entirely electric vehicle models by 2023, with two of the new EVs coming out in the next 18 months. Even more humiliating, this year Ford saw its market value fall below Tesla, even though it earned $4.6 billion in 2016 and Tesla has never made a full-year profit.

For now, Ford has no plans to start producing its own batteries and battery packs the way Tesla is doing. It will also reduce by 25% the time it takes to take new cars and trucks from the idea stage to vehicles sitting in dealerships.