Ford Motor CEO Jim Farley on Friday touted the automaker’s strategy for electric vehicles and told CNBC that the company intends to compete strongly in the growing market.
Farley’s comments on “Squawk on the Street” came a day after Ford reported better-than-expected earnings in the fourth quarter. As part of that announcement, Ford said it would increase its electric vehicle investment to $ 22 billion by 2025, almost double what it had previously promised.
Ford’s shares rose 2.7% on Friday to around $ 11.70 apiece.
“We won’t leave the future to anyone,” Farley told CNBC’s Phil LeBeau. “Our electric strategy is very specific. We will invest in segments where we are the dominant player and we have economies of scale like the F-150, the transit van and our Mustang.”
As Ford provides new capital for the years to come, Farley said the company’s EV transition is now yielding results, pointing out that its all-electric Mustang Mach-E crossover has hit showrooms. He said he viewed the Mach-E as a “credible competitor” to Tesla’s compact SUV known as the Model Y.
Ford’s all-electric transit van is expected to arrive by the end of this year, Farley said, and the company’s work on a Michigan plant to build the electric version of its best-selling F-150 is ongoing. “This is the year. We’re not talking about aspirations,” said Farley, who took over the business on October 1.
The charging connection for the Ford E-Transit is located in the radiator grille of the vehicle.
Wall Street’s focus on electric vehicles has increased. A number of players in space, including battery manufacturers and charging station companies, have gone public in the past few months. Ford’s Crosstown rival General Motors has also drawn street attention for its aggressive investments in electric vehicles. GM said last week it plans to cease production of all diesel and gasoline-powered cars, trucks and SUVs by 2035.
Before the announcement, Adam Jonas, an analyst at Morgan Stanley, told CNBC that GM, led by CEO Mary Barra, may be orchestrating “one of the most profound strategic turns not only in the auto industry, but also in the economy.” GM stocks are up more than 100% in the past six months, while Ford’s stocks are up more than 65% over the same stretch.
As the production and adoption of electric vehicles increases, some have raised concerns that there could be a battery shortage. Farley acknowledged that the company “needs to make sure when Ford ramp up EV manufacturing” [battery] Care so that we don’t end up in a situation where we are in chips. “Ford had to temporarily cut F-150 production to respond to an ongoing semiconductor shortage affecting the global automotive industry.
“That will be due to each manufacturer making the commitment,” Farley said. “We have to make our own decisions about vertical integration. Our $ 22 billion [EV investment] doesn’t even include that. You could expect more news from us on this vertical integration. “