Ford Motor Co F CEO Jim Farley discussed the company’s distinct electric vehicle strategy compared to rivals and his professional relationship with Tesla CEO Elon Musk.
What Happened: Farley, in a Monday interview with Yahoo Finance, emphasized that the automotive industry will offer various powertrain options in the next 5 to 10 years, including EVs, hybrids, and even combustion engine vehicles for specific needs like towing. He acknowledged EVs’ importance but stressed they wouldn’t be the sole solution.
Profitability is paramount for Ford’s EV investments, Farley noted. He also highlighted that future Ford EVs will have lower price points to address customer demand for affordable electric vehicles. Electric vehicles are currently priced significantly higher than combustion engine vehicles due to the higher costs of manufacturing and batteries.
Despite being the second-largest EV seller in the U.S. market behind Tesla, Ford sees strong customer loyalty with its EVs. “Customers who buy Mach-E or Lightning don’t go back to an ICE vehicle,” Farley said.
Differences & Relationship With Musk: Farley contrasted his view of Ford as a “passion company” that prioritizes the emotional connection with its vehicles, beyond just appliances or “iPhones on wheels,” with Tesla’s focus on AI. However, he acknowledged that Ford vehicles will still incorporate advanced AI features.
While Ford and Tesla compete in the EV market, particularly with the Mach-E SUV and Model Y SUV, Farley characterized their CEO relationship as professional and respectful.
“I think there’s a mutual respect,” Farley said. “I think when Elon started and started scaling Model Y and Model 3, he very much followed the Henry Ford model with the Model T, increasing his utilization of his plant and bringing the cost down for customers as he went mainstream with EVs. I think it’s been a largely positive relationship,” he added, acknowledging Musk’s accomplishments.
“He is really an incredible person … You know his charging network is [a] very valuable and really wonderful asset for the company um. But he’s very responsive and I think it’s because he knows we respect each other.”
The recently announced partnership allowing Ford EV customers to charge on Tesla’s Supercharger network has seen high demand. Ford has received 100,000 applications for adapters and has shipped a few thousand so far, with plans to fulfill the remaining 90,000 applications.
Ford’s EV Financials: Ford’s EV segment, called “Model e,” experienced a significant increase in its EBIT loss, reaching $1.3 billion in the first quarter compared to $0.7 billion in the corresponding quarter of 2023. Revenue also fell 84% year-over-year to $0.1 billion, partly due to industry-wide pricing pressure. For 2024, Ford expects its EV division to post an EBIT loss between $5.5 billion and $5 billion, wider than the $4.7 billion loss recorded in 2023.
Read More: YouTuber MKBHD Praises Lucid Air Sapphire: ‘If…It Couldn't Be A Tesla, It Would Have To Be This'
Image via photos on Shutterstock
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
