Published: Thu, December 07, 2017
Business | By Max Garcia

Ford betting 'very heavily' China will dominate the electric vehicle market

Ford betting 'very heavily' China will dominate the electric vehicle market

Direct sales from automaker to consumer are possible in China and other global markets, but the practice is generally illegal in most U.S. states.

Ford Motor Co is expected to sign as early as Thursday a deal with Alibaba Group Holding Ltd which may allow the US automaker to test selling cars to consumers in China through Alibaba's online retail arm Tmall, as well as via a new "auto vending machine" store concept, according to a Ford source familiar with the matter. The deal could be announced as early as tomorrow, and it would reportedly allow the USA -based automaker to sell cars on Tmall, which is Alibaba's e-commerce division.

According to USA Today, HIS Markit analyst Namrita Chow said, "Ford's new strategy highlights the importance of China in the company's growth plans".

In addition to Ford selling cars with Alibaba, the agreement would also reportedly allow the automaker to test a store concept called an "Auto Vending Machine".

Ford CEO Jim Hackett and chairman Bill Ford, Jr., are reportedly preparing to letter of intent with Alibaba.

Ford's sales in China have been weak in recent months, and the company is scrambling to come up with electric and hybrid vehicles to comply with strict Chinese quotas over production and sales for so-called new energy vehicles, or NEVs, Reuters reported. Tmall's "Automotive Vending Machine" is a parking garage that somewhat resembles a giant vending machine to be sold directly to consumers.

Reuters' source at Ford also reportedly provided details about what Ford's direct-sales presence in China could look like. The vehicles would then be delivered to them on the vending machine's ground floor.

The franchised retail stores could also fix and offer maintenance on the vehicles, which still makes the sales model sound like auto dealerships in the U.S.

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