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Ford CEO Jim Farley talks with Yahoo Finance Senior Reporter Pras Subramanian to discuss Ford’s shaky 2023, competing with China’s dominance in EV sales, and what’s coming ahead for the company.
When asked about EV adoption in the U. S. , he is asked about EV adoption. In the U. S. , Farley discusses Tesla’s (TSLA) recent price cuts and overall values in the U. S. “Our electric vehicles are growing, but prices are down. What this tells us is that these are customers. We are not willing to pay the same premiums as early adopters. And we’re also number two when it comes to hybrids. So at Ford we have all these options. . . We’re starting to see hybrids and electrics take off right now. “We’re not going to pay a lot more, which means for the OEM that’s the cost. We want to reduce costs drastically. “
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I recently flew to Charlotte, North Carolina, among other things NASCAR’s U. S. headquarters. I’m in the U. S. , to preview all of Ford’s new (F) Performance race cars and meet with its CEO and Chief Race Driver, Jim Farley.
Farley was in good spirits; for one thing, he enjoyed showing off the new Mustang GT3 race car and new high-performance EVs like the Lightning “Switchgear” pickup. Another thing he enjoyed talking about? His expectation that 2024 will be a big year for Ford — one of the biggest since he took the helm three years ago.
But let’s begin with Farley’s passion for racing.
In a first for Ford Performance, the company’s motorsports department brought all of its racing efforts to the forefront with what it called the launch of the 2024 season. Ford’s presence in motorsports has been expanding in recent years, from racing Mustangs in NASCAR and now in Europe with the GT3 series, to off-road endeavors with the Ford Bronco and an upcoming Raptor pickup truck at the Dakar Rally.
Farley said the company races for two reasons: to bring attention and focus on “passion products” like Mustang and Bronco, but also because he believes motorsports is good business, and not just for marketing. Ford believes racing can also be a profitable venture.
“We believe that auto racing can just be a sustainable business [that] I’ve noticed in my 40-year career,” Farley said in an interview with Yahoo Finance (video above).
Since taking over as CEO, Farley, a former Toyota executive, has tried to change the way Ford approached the market. It wouldn’t be an all-for-all company, like Toyota, for example, that offers a broad portfolio of automotive offerings.
Farley said Ford was done with making “vanilla” or regular cars; I was looking to sell cars that other people were passionate about. “We need the race to count more and more to our production cars, not in the afterlife, as it affects the geometry of our suspension [for example]. Like we had to sell street racing cars in gigantic quantities,” he said.
Not surprisingly, Farley is a race car driver. He, for example, competed in Rolex Classic races in Monterey with cars like his 1966 Ford GT and his 1978 Lola T298, which I saw him drive in Laguna Seca, among the specially designed race cars.
And it’s this specific attitude that Farley needs to instill in 2024. Last year wasn’t the most productive for Ford; A grueling six-week contract negotiation with the United Auto Workers (UAW) and declining demand for electric cars led the company to reconsider its long-term strategy. But the company still expects to achieve adjusted EBIT (earnings before interest and taxes). between $10 billion and $10. 5 billion in 2023, necessarily comparable to 2022, despite the UAW strikes.
Another challenge in its transition to electric cars was revealed this week, when Ford pulled 1,400 employees from F-150 Lightning production at its Rouge EV production center, as demand for electric trucks continues to decline.
Despite this, Farley is optimistic that 2024 could be big one for Ford as it doubles down on its popular vehicles and adjusts its EV rollout. While it will cut a factory shift for the Lightning, it will boost production of the Bronco SUV and Ranger mid-size pickup.
“I’ve been running the company for 3 years and 2024 is the first year where I can say we have a chance to have an extraordinary year for many reasons,” Farley said. “We’ve overcome our hard-working problems and we’re negotiating in the U. S. “We’re not going to be in the U. S. , but most importantly, we’re launching about six new products and we already have a new line of Broncos and Mavericks. “
Farley believes Ford’s new product strategy of not being everything to everyone and focusing on passion products will pay dividends in 2024. Ford EV strategy is also evolving with a long-term focus on bringing prices down as the company sees EV sales stabilizing at around 10,000 a month. A pivot to hybrid is helping alleviate the cost of that transition to EVs — in particular the F-150 — as Ford attempts to give its customers what they want.
“We’re No. 2 in hybrid sales in the U. S. ,” Farley said. “So at Ford we have all these options: an electric F-150, a hybrid or an ICE [internal combustion engine]. It doesn’t matter, let the visitor choose. “
Wall Street would likely be skeptical that Ford and Farley would give up on their EV ambitions after being enthusiastic just a year ago, but if Ford manages to sell and maintain profitability, all is probably forgiven.
After a decent sales year in 2023, Farley believes Ford is poised to continue winning at the showrooms with new products in 2024, as well as on the track with new race cars. While Farley talked about the clients for those two projects, The Course’s verbal exchange returned to this year’s big races, and he revealed which race he hopes to win.
“To bring a Mustang back to Le Mans [permanent 24-hour power race] and beat Porsche and Ferrari at home, on their own turf in Europe, not with a GT prototype or a one-off car, but with an American car that anyone can buy for $30,000?It would be great to beat Ferrari and Porsche,” a moment that all Ford employees, as well as chairman Bill Ford, would be very proud to see, he said.
“We’re going to do everything we can,” he added, “we’re going to give Ford Motor Company the win in this race. “
Does this plot ring a bell?
Pras Subramanian is a journalist for Yahoo Finance. You can see him on Twitter and Instagram.
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