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FORD’S JIM FARLEY: EV plan “exactly what we need”

For 14 months as CEO of Detroit-Ford Motor Company, Jim Farley has been familiar with the baseball metaphor.

The industry he likes to say is in the “early stage” of electrification. In Ford’s third-quarter earnings call, he said the company was “making a big difference” in its new products and services.

As Farley says, if the pivot to electrification is like a baseball game, Ford will have some important at-bats.

Automakers will begin production of the E-Transit electric van this month and are preparing to start selling the F-150 Lightning pickup next spring. In 2022, Ford will also begin construction on the Blue Oval City Campus in Tennessee. This includes the first new assembly plant in the United States for the first time in decades.

Farley, 59, spoke with staff reporter Michael Martinez and news editor Nick Bankley last month at the 12th floor office of headquarters in Dearborn, Michigan. Here is the edited excerpt.

NS: Why are you confident enough to double your planned EV production to 600,000 units a year? Was it a Lightning reservation number?

A: Demand is two to three times higher than expected. Therefore, it was necessary to double the capacity. I had to triple it if possible, but I can’t. Lightning, when we first got together, we talked about a volume of 20,000 units a year. And I wasn’t. As a result, we have achieved a capacity of well over 20,000, which is far from the current demand for 160,000 units. Currently, the number of reservations is approaching 200,000, and we will move to the actual order.

What percentage of F-150 Lightning bookings do you think will be converted into actual sales?

I think it will be 80% north, but I don’t know. The problem is that full-size trucks have become much more expensive since the launch of Lightning. As a result, the prices we have launched are becoming more and more attractive, and looking at the move from booking to order, I think it will be very high north of Bronco.

Did you understand who wants to buy Lightning compared to petrol trucks?

So far it’s an increment. About 30 percent are F-150 customers, but 70 percent are unfamiliar with brands and pickups.Like a customer [for whom] The mileage and pickup image didn’t work, but as we modernized it, they found it more interesting.

If someone is new to EVs, what makes them choose lightning over Tesla or Mustang Mach-E?

It’s like the modernization of American horses. It’s a very positive image. Pickup trucks are mainstream products, but they have a unique feel. I think it’s a luxury customer, but you don’t have to worry about your neighbors “did you buy a pickup truck, a BMW or something?” So it has no stigma because it is electric.

But what we mainly hear is that we like Pro Power Onboard. In other words, the idea is that if you lose power, you can still power your home. This is a true breakthrough feature for these customers.

Since becoming CEO, you have really accelerated Ford’s EV plans. Ultimately, does Ford need to do 100 percent EV in the US?

Ford has a lot of local customers that many other brands don’t have. We have Super Duty customers who do heavy duty towing. Horse trailers, people in the energy industry who are towing long loads over very long distances. It’s hard to imagine that all of these customers will be using electricity in the next decade. They are actually as interested in technology as anyone else. It’s just that their use cases are different from traditional vehicle design methods. At least for Ford, I feel the transition is happening faster than we expected. But again, this is probably the first inning of a 9-inning game.

Will we need a new assembly plant to move beyond the blue oval city to EV, or will we reuse the existing one?

Obviously, when using 40% electricity, there are many options on the assembly side. We announced this new factory. It will be a huge site, and it will make cars we don’t have today from a brand new platform, the full size pickup platform. I think it will be incredibly large. What do I know for sure that we have to build more? Battery plant.

Was Ford too conservative to cancel a tip order that it didn’t think was needed in the early stages of COVID?

Looking back, absolutely. But who knew? I was on the Dearborn truck when I shut down everything.I was together [UAW President Rory Gamble] And he said he was afraid of people getting into work.I saw John Savona and Kumar [Galhotra] “Let’s shut it down.” How did you know

You have come up with the idea of ​​transporting an unfinished car to a dealer. Is it past that point?

I think we have to stay very open. We are still discussing today. I think we trust the dealer. They are one of our greatest advantages. I have to do that and I don’t hesitate at all if I carry out the proper quality assurance and process. We are not in that situation so far. It looked like us early on, but I haven’t counted it yet. I think this will continue to some extent until 2023, but no one knows what will happen next year.

Ford’s inventory has almost tripled under your watch. Why does Wall Street like what you’re doing now?

Ford works best in planning. You have to make a plan. There is a Ford + plan. Everyone knows what it is. We are running against that plan. We are turning the automotive business around, improving quality and improving launches. And if there’s one thing I want to leave you with, it’s that I don’t want to change this plan. That’s a good plan. That’s exactly what we need. But as always, it’s the execution that drives me to the night. How can we be second in the United States in the next few years in the field of battery electricity? That is the execution.

Are you considering spinning off your AV and EV businesses and even Ford Pro?

Everything is at the Ford table. Whatever is best for Ford. He said the availability of Argo in the capital markets is already very open. This is a big change for us. Everything to do this migration and create this value is in the table. No one is sacred. In the last 14 months we have left Brazil’s manufacturing industry and the same has happened in India.

Does Ford need to do a better job of educating dealers about EVs? If so, what are you going to do about it?

absolutely. First of all, you have to understand that Ford’s market representatives and dealer network are very different from our competitors. We have a very strong power in commerce. A commercial dealer is like something completely different from a retailer. Looking at a commercial dealer (Cleveland Brian), he sells nothing but white trucks and vans. And 100% of his profits come from service. He is open 24/7 and deals with people all over Ohio. Therefore, Brian’s dealers will change dramatically. However, the battery-powered electric vehicles we plan to distribute and the services we plan to sell at FordPro are very different from retail stores. It sells telematics services and funds not only the vehicle, but also the small customer shop itself. We have a complete charging solution for the customers we get.

We want to be a supercharged network for depot charging. The businesses of these dealers will become increasingly remote services and will be tightly integrated into FordPro’s service portfolio. Their business will be more specialized. Our retailer, this change in electricity is a big change for them and their staff. They also have to go to remote areas for vehicle maintenance.And the question we are actually trying to get [use over the air updates on] Vehicles are completely different from the questions we receive from our customers today. It’s a kind of Genius Bar relationship with a customer. Perhaps there are more phone calls and phone calls than going to the dealer. Much of your business is remote, as your customers want. As long as we have knowledge of vehicles, yes, we have a big job. But we are doing it now.

Ford Motor Company swept the brand during the Great Recession. Have you ever thought about expanding Ford’s brand portfolio?

I think I’m with Broncos and Mustang. But instead of vertical brands like Mercury, they are doing it horizontally and creating these vehicle families. Some ICE, some digital. Oh, yes. I think Maverick will be a new franchise. Think about what you did. It was a $ 20,000 hybrid car and the reaction was completely out of control. Can the Maverick family make other affordable cars? Yes, of course you can. I think such brand extensions will be needed, but they stay within the scope of our icon. FORD’S JIM FARLEY: EV plan “exactly what we need”

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