Jim Farley, CEO of Ford Motor, disclosed the automobile’s electric vehicle strategy on Friday, telling CNBC that the company intends to compete strongly in the growing market segment.
Farley’s comments on “Squawk on the Street” came a day after Ford reported better-than-expected fourth-quarter earnings. As part of that announcement, Ford said it would increase its investment in electric vehicles to $ 22 billion by 2025, nearly double what it had previously pledged to spend.
Ford shares rose 2.7% during Friday’s session to about $ 11.70 per piece.
“We’re not going to give the future to anyone,” Farley told CNBC’s Phil LeBeau. “Our electrical strategy is very specific. We will invest in segments where we are the dominant player and we have scale, like the F-150, the Transit van, our Mustang.”
While Ford is buying new capital for years to come, Farley said the company’s EV transition is paying off now and noted that its all-electric Mustang Mach-E crossover has hit showrooms. He said he considers the Mach-E a “credible competitor” to Tesla’s compact SUV known as the Model Y.
Ford’s all-electric Transit van is expected to arrive later this year, Farley noted, and the company’s work at a Michigan plant to build the electric version of its best-selling F-150 continues. “This is the year. We’re not talking about aspirations,” said Farley, who took over as chief executive on Oct. 1.
The charging port for the Ford E-Transit van is located in the rear of the vehicle.
Ford
The concentration of Wall Street in electric vehicles has been increasing. Several players in the space, including battery manufacturers and charging station companies, have made it public in recent months. General Motors, Ford’s rival, has also caught the eye of the street for its aggressive investments in electric vehicles. GM said last week that it plans to end production of all diesel and gasoline-powered cars, trucks and SUVs by 2035.
Even before this announcement, Morgan Stanley analyst Adam Jonas told CNBC that under the leadership of CEO Mary Barra, GM could be organizing “one of the most profound strategic changes, not just in the industry. of the automobile, but also in the businesses ”. GM shares have risen more than 100% in the last six months, while Ford shares have risen more than 65% in the same stretch.
As the production and adoption of electric vehicles grows, some have expressed concern that there may be a shortage of batteries. Farley acknowledged that as Ford increases the manufacture of electric vehicles, the company “must ensure [battery] “Ford had to temporarily reduce production of F-150s in response to a continuing shortage of semiconductors affecting the global auto industry.
“This is going to happen for all manufacturers to commit,” Farley said. “We have our own decisions on vertical integration. Our $ 22 billion [EV investment] it doesn’t even include that. You could expect more news from us about this vertical integration. “