Summary
– Ford CEO Jim Farley believes partial electrification technologies like hybrids and extended-range electric vehicles are not just transitional, but a crucial part of the company’s future strategy
– Farley sees hybrid vehicles and extended-range electric vehicles (EREVs) as profitable options with less range anxiety, fewer batteries, and lower costs compared to traditional EVs
– Stellantis NV and Ford are both introducing EREVs like the Ram 1500 Ramcharger and the F-150 Lightning truck, respectively, to offer longer ranges including both electric and combustion engine power
– Farley recognizes the importance of adopting new technologies like EREVs quickly to remain competitive in the changing automotive landscape
– Ford is focused on integrating talent and digital services from its legacy ICE business into its EV ventures, embracing a seamless approach to powertrain options in its digital offerings
Article
In a speech at the Bernstein Annual Strategic Decisions Conference, Ford Motor Co. CEO Jim Farley emphasized the importance of “partial electrification” options such as hybrids and extended-range electric vehicles. He highlighted that this technology is not just transitional but an integral part of the company’s strategy. Farley expressed that hybrid technologies are crucial due to affordability and range challenges, explaining that the hybrid F-150 truck represents a significant portion of sales for Ford. They are also exploring extended-range electric vehicles (EREVs) that have a generator on board to recharge the battery and extend the vehicle’s range.
Competitors like Stellantis NV are also recognizing the potential of EREVs, with plans to launch vehicles like the Ramcharger pickup that can provide extended range through a combination of battery power and a combustion engine. While this technology offers benefits such as a longer range and reduced battery costs, it raises questions about regulatory acceptance since it is not a zero-carbon emissions vehicle like traditional EVs. Farley acknowledged the importance of engaging with regulators to ensure the acceptance of EREVs as a viable solution for the market.
Ford’s position in the auto industry includes strengths in its legacy ICE business, particularly in commercial divisions like Pro. Farley suggested that companies solely focused on all-electric vehicles may face capital challenges if they do not have a profitable business model. He also noted the technological advancements of Chinese automakers in areas like software and digital services, posing a competitive threat to Western companies. Ford aims to leverage its expertise in ICE vehicles and commercial divisions to navigate the evolving landscape of electric vehicles and digital advancements in the industry.
Ford’s acquisition of autonomy partner Argo AI in 2022 reflects the company’s commitment to innovation in software and autonomous driving technologies. Farley emphasized the integration of software teams within the existing operational structure of Ford, rather than creating a separate division as seen in the transition from ICE to EV. The CEO underscored the importance of safety-critical aspects in developing autonomous technologies, requiring a high level of talent integration within the company. By maintaining a unified approach to powertrain options and digital services, Ford aims to leverage its diversified offerings to maximize revenue opportunities in the evolving market landscape.
In discussing the future of autonomous driving, Farley highlighted the challenges of proving the safety and operational domain of Level 3 autonomous vehicles, where the vehicle can take over driving functions under certain conditions. This technological advancement raises questions about consumer willingness to pay for added convenience and time-saving features in their vehicles. Ford is engaging in discussions about the pricing and market acceptance of autonomous technology, recognizing the potential value it may provide to consumers. With a focus on integrating talent and technology across various powertrain options, Ford aims to position itself as a leading player in the evolving automotive industry landscape.
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