Ford Motor CEO Jim Farley praised the automaker’s electric vehicle strategy on Friday, telling CNBC that the company plans 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 is increasing its investment in electric vehicles to $ 22 billion by 2025, almost double what it had previously promised to spend.
Ford’s shares rose 2.7% during Friday’s session, to about $ 11.70 each.
“We are not going to give the future to anyone,” said CNBC’s Farley Phil LeBeau. “Our electrical strategy is very specific. We will invest in segments where we are the dominant player and we have scale, such as the F-150, the Van Transit, our Mustang.”
While Ford is pledging new capital for years to come, Farley said the company’s EV transition is paying off now and pointed to the fact that its all-electric Mustang Mach-E crossover has hit showrooms. He said he considers Mach-E to be a “reliable competitor” to the Tesla compact SUV known as Model Y.
Ford’s all-electric Transit van is expected to arrive later this year, Farley noted, and the company’s work at a plant in Michigan to build the electric version of its best-selling F-150 is underway. “This is the year. We are not talking about aspirations,” said Farley, who took over as chief executive on October 1.
The loading door for the Ford E-Transit van is located on the vehicle’s grille.
Ford
Wall Street’s focus on electric vehicles has increased. Several players in space, including battery manufacturers and charging station companies, have gone public in recent months. Ford’s rival General Motors is also drawing Street’s attention 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 that announcement, Morgan Stanley analyst Adam Jonas told CNBC that under the leadership of CEO Mary Barra, GM may be orchestrating “one of the most profound strategic upheavals, not just in the automotive industry, but in business”. GM shares have risen more than 100% in the past six months, while Ford shares have risen more than 65% in the same period.
As the production and adoption of electric vehicles grows, some have raised concerns that there may be a battery shortage. Farley acknowledged that as Ford increases EV manufacturing, the company “needs to ensure [battery] so that we don’t get into a situation like that of chips. “Ford had to temporarily reduce the production of the F-150 in response to the semiconductor shortages that are affecting the global automotive industry.
“It will depend on each manufacturer that makes the commitment,” said Farley. “We have to make our own decisions about vertical integration. Our $ 22 billion [EV investment] it doesn’t even include that. You could expect more news from us about this vertical integration. “