What Ford's CEO says about its electric vehicle plans
AILSA CHANG, HOST:
Ford's F-150 pickup truck is the bestselling vehicle in America, and it has been for decades. Now the company has ambitious plans to go electric, but how ambitious, exactly? Well, that's been changing. Ford CEO Jim Farley spoke to NPR last week with an update on the company's plans. And NPR's Camila Domonoske joins us to explain. Hey, Camila.
CAMILA DOMONOSKE, BYLINE: Hi, Ailsa.
CHANG: So I understand that you and Farley actually met up on the road. Is that right?
DOMONOSKE: Yeah. That's right. He was on the tail end of a road trip over in your part of the country, going from Northern California down to Las Vegas...
DOMONOSKE: ...In an electric F-150 Lightning pickup truck. He was meeting with salespeople, talking to customers, chatting with people at charging stops and running Ford from the driver's seat, with his teenage son riding along.
CHANG: I wonder how much his - how much fun his son was having. OK. So Ford says it's losing money on electric vehicles. Why is that?
DOMONOSKE: Right. Partly this is just really expensive - right? - for all automakers. It costs billions of dollars to make this big switch. And it takes time for that investment to pay off. But Ford is also making some choices here. Like, they just cut prices on that Lightning, that pickup truck he was driving, which was already unprofitable before they knocked thousands of dollars off. So you might wonder, why would they do that, right? And Farley says this is all about selling EVs today at a loss to sell EVs profitably later on.
JIM FARLEY: We're losing billions on our EV business. But what I found is that people who go electric don't go back. And so the first people who buy our first-generation electrics are going to be the first people to buy our second-generation electrics.
DOMONOSKE: And Ford says those second generation electrics will be simpler to build. They'll have more affordable batteries, so they'll actually be profitable. So they want to make money selling you your second electric truck.
CHANG: OK. Well, I know some automakers have promised that they're going to go entirely electric, like, in a decade or two decades. Is that something that Ford is pledging to do as well?
DOMONOSKE: No. Ford hasn't made that kind of global commitment to not make any more ICE vehicles, eventually. But what the company did do was it set a really aggressive near-term timeline for scaling up. We're talking about a company that made less than 100,000 electric vehicles last year and was planning to make 2 million per year by 2026...
DOMONOSKE: ...Which is really soon.
DOMONOSKE: On his most recent call with investors, CEO Jim Farley, he did delay some of these targets, and I asked him about that.
FARLEY: We had an earnings call, and everyone's like, Ford is, you know, backing off its EV commitment. I'm like, no, not at all. It's, like, one specific product.
DOMONOSKE: He said that one of their interim targets for this year they're pushing off because of a problem with one kind of vehicle that they're only selling in Europe. This was a surprise to me, honestly, 'cause that's something he didn't talk about on the earnings call and hadn't really been emphasizing this vehicle as such a huge part of their plans that I'd heard before. But he was really adamant that this was not a sign of a bigger strategic shift.
CHANG: OK. But ultimately, like, what does this mean for consumers? Like, when is it realistic to expect an affordable electric F-150 or some other truck?
DOMONOSKE: Yeah, or another kind of vehicle. Companies are competing to slash electric vehicle prices right now. They are coming down significantly, but they're still more expensive kinds of vehicles that are being made, for the most part. The Lightning, even after a big price cut, a popular trim model might be 70 grand, which is actually very normal for a full-sized pickup truck these days. And there's not really a cheap Ford in the near-term horizon. Farley says he thinks it's going to be years before any company can afford to make cheap EVs. Some companies say they can do it faster. This is - you know, it's not an abstract business debate here. There's a lot hanging on how quickly these prices can come down.
CHANG: That is NPR's Camila Domonoske. Thank you, Camila.
DOMONOSKE: Thank you, Ailsa. Transcript provided by NPR, Copyright NPR.
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