Ford CEO on making money on EVs

‘After 120 years we’ve seen a lot of competition’ says Ford (F) CEO Jim Farley to Yahoo Finance Executive Editor Brian Sozzi. His comments come as the automaker unveils a 1 billion dollar 30-acre innovation district, centered around the iconic Michigan Central Station. Sozzi asked if Farley had a date on the calendar for making money on the big EV push, ‘we wouldn’t allocate capital if i didn’t think it was profitable’ he responded. The new development serves as something of an emblem for Ford’s future ambitions; much of that, today, takes the form of the push into electrification. It hasn’t been an easy road, but despite fierce competition from the likes of Elon Musk’s Tesla, Ford has managed to establish itself as America’s No. 2 electric vehicle brand. Price cuts for the F-150 Lightning and the Mustang Mach-E have been a part of the strategy however; the latter being the second bestselling electric SUV in the United States last year. Earlier this year, however, something of a bombshell; the company announced it was reassessing its EV plans, saying though there was growth to come, widespread adoption would take time. ‘The hard part is delivering and executing affordable EVS that make money’, Farley added.

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Video Transcript

What is it?

Hard to stay committed to EV SI mean for your public company.

For it has said it’s going to lose four or $5 billion whatever it is on EVs this year.

Is it hard to stay committed to that vision when these losses are happening?

And how long do you stay committed to it?

Well, I think first of all, we’re not gonna invest in the future of EVs unless we’re convinced we be profitable.

So I’m not gonna That’s my job.

I’m not gonna allocate capital to my leadership team or anyone in the company if if we don’t think we’re gonna be profitable in the next cycle of product so you know that aspect is is kind of undeniable.

It’s unnegotiable.

Um, you know, we we really we really believe in the consumer experience for an EV.

And so we want the next ones to be more affordable.

And that’s why we’re investing in more affordable EVs in the next cycle of products that people see in from Ford.

In the next couple of years.

We’re number two in EVs in the US behind Tesla, a long way behind.

But we’re still there and people love their Maquis and Lightnings, and they’re gonna like the new ones.

Even better, Um, it is What’s hard about it is making the physical changes to be profitable, to bring the cost down, to have large unit castings to really change the way we engineer the vehicle, uh, to minimise that size of the battery because the battery is so expensive and such a big driver of the cost.

So the hard part for us is delivering and executing on affordable EVs that make money just like Henry Ford did with model T.