By Nora Eckert
DETROIT (Reuters) -Ford Motor has killed a program to develop next-generation electrical architecture – the brain of modern cars – that its executives have called pivotal to competing with electric-vehicle pioneers such as Tesla, three sources familiar with the matter told Reuters.
Ford had invested heavily in the system, known internally as FNV4 (for fully-networked vehicle), to streamline vehicle-software functions. The goal was to cut costs, improve quality and add profitable features in both electric and gasoline-powered vehicles.
The project was abandoned because of ballooning costs and delays, the sources said.
A Ford spokesperson said the company will absorb what it learned from developing FNV4 into its current software system, and it remains focused on delivering an advanced electrical architecture with its so-called skunkworks team.
The team, based in California, is tasked with developing advanced software and affordable electric vehicles.
“We are committed to delivering fully connected vehicle experiences across our entire lineup, regardless of powertrain, while many others in the industry are bringing the most advanced tech only to electric vehicles,” the spokesperson said.
Ford CEO Jim Farley tasked Doug Field, a former Apple and Tesla executive who joined Ford in 2021, with completing FNV4. Field is one of the top earners at the company, and made $15.5 million last year.
Ford started informing a select group of employees of the decision last week through a company video, according to two people familiar with the matter. A third source said the company executives made the decision weeks ago.
Ford is refocusing its efforts on its current electrical architecture and continuing to bet on the skunkworks team, the video said.
While EV startups like Tesla and Rivian have built their own software from the ground up, legacy automakers have struggled to transform their more complicated and costly software systems, which integrate computer code from dozens of suppliers.
For example, a supplier that makes a power-operated seat for Ford typically provides and controls the code associated with its function. Multiply that by all the systems and electronics across a car, and you have a tangled mess of code that makes it difficult for the automaker to quickly deliver software updates.
Farley talked about the conundrum on the “Fully Charged” podcast in June 2023.
“We have about 150 of these modules with semiconductors all through the car,” the CEO said. “The problem is the software is all written by 150 different companies, and they don’t talk to each other. So even though it says Ford on the front, I actually have to go to (supplier) Bosch to get permission to change their seat-control software.”
This added complexity also can create quality problems, which Farley has been vocal about reducing at Ford, as it has posted industry-topping recall numbers since 2021, the year after Farley was appointed CEO.
Tesla pioneered the use of so-called over-the-air software updates to add functions or fix bugs, an increasingly common practice among competitors including a slew of surging Chinese EV makers led by BYD.
NEED FOR SPEED
The failed project marks a significant setback for Ford as it races alongside Detroit rivals General Motors and Jeep-maker Stellantis to develop more sophisticated electronics and software. Nailing these systems is among any automaker’s primary goals, industry experts say, because they provide a framework for car makers to deliver better vehicles more quickly.
“The only strategic advantage any company can have is speed,” said Terry Woychowski, president at engineering company Caresoft Global, while showing off the complicated guts of these electrical systems at the company’s warehouse.
Farley said as much in a September interview with Reuters.
“We’re completely committed to building that software-enabled vehicles, not just for our EVs, but even more exciting, in a way, for our next generation of ICE [internal combustion engine] and hybrid vehicles,” he noted.
Ford’s next generation software was meant to be a “zonal” system, in which bundles of smaller software brains control the functions in specific parts of the vehicle and communicate with a larger central brain. Such a system shortens the length of the expensive vehicle wiring harnesses and allows for speedier over-the-air updates.
These advanced systems also provide opportunities to entice drivers to buy software-enabled features, such as assisted-driving systems, sometimes through subscriptions. Ford’s Vice Chair and former CEO John Lawler said in 2023 that FNV4 had the potential to accelerate and increase the number of services on each vehicle sold.
BIG INVESTMENTS, LOSSES
While these electrical systems are dependent on lines of virtual code that developers type and refine over years, they also require expensive hardware that can fundamentally change an automaker’s manufacturing process.
FNV4 development contributed to Ford’s losses on software and EVs, which totaled $4.7 billion in 2023 and $5 billion in 2024.
“The electrical architecture system in a vehicle is one of the most challenging areas from an assembly perspective,” said Woychowski, describing their sprawling wiring harnesses as “copper anacondas.”
When Reuters asked Farley about the program in September, he said the company had its first prototype vehicle running completely on Ford software. Farley said at the time that Ford was on track to deliver the next-generation architecture and that a prototype had impressed him.
“For me as a car person,” he said, “I was like, ‘Are you kidding me?'”
(Reporting by Nora Eckert; Editing by Brian Thevenot and Richard Chang)
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