Ford CEO Jim Farley said its electric vehicles won’t be as cost-effective to produce as internal combustion (ICE) vehicles until 2030-2035.
During an appearance at the Bernstein Strategic Decision Conference, Mr. Farley was asked when Ford would strike a cost balance between electric and combustion vehicles.
“2030 to 2035. We are there, right now. It’s between the second and third cycles of EV products,” said Mr Farley.
Ford is currently finalizing the development of a second-generation electric vehicle, with the first to enter production in 2025 and has already begun work on a third-generation EV.
“We have to stop thinking about trains. Mr. Farley talks about the cost of making electric vehicles.
“It turned out that batteries were so expensive that we had to actually redesign the whole car to reduce complexity, and most of the savings were in reduced labor and component complexity.
“I would say that what we have learned is that for large die-cast cars, greatly simplifying the design of the vehicle can eliminate a lot of that gap.”
The company announced earlier this year it is expected to lose 3 billion US dollars ($4.49 billion) before tax on its Model e electric vehicle business this year, up from $2 billion last year, as it readies new production sites in Kentucky and Tennessee.
Ford’s investment in three battery and electric vehicle plants is expected to cost the company about US$11.4 billion ($15.7 billion) and create around 11,000 jobs.
However, Ford said it expects production costs relative to sales of first-generation electric vehicles to break even this year.
Mr. Farley said there’s been a lot of focus on Ford’s price reductions Mustang Mach-E and the ongoing price war with electric vehicles in China.
“We have increased our prices since launch by $11,000 for Lightning and $6,000 for E-Transit. Nobody wrote that story, nobody watched it,” said Mr. Farley
“People keep talking about the Mach-E versus the Model Y, which we have to respond to because we cross-shop with those vehicles.
“But people need to realize that the competitive scene for electric vehicles is only in a few segments. It’s a small part of the industry.”
Mr. Farley said the Mustang Mach-E accounts for two-thirds of the company’s electric vehicle production volume, with Lightning F-150 And Electronic transit follow behind.
He predicts that, overall, China and Europe will have an electric vehicle adoption rate of 50-60% by 2030 while other major markets such as Africa, South America and the Middle East will only be able to. hit “up to 10, 15, 20% in that timeframe” and India could only get 10% EV market share.
Mr Farley sounded less confident that the US would be able to achieve a 50 per cent EV adaptation rate by 2030, saying that “more regulatory support will be needed.”
Recently California has been promoting for tougher EV regulations and seek to impose an ICE ban by 2035.
The Ford executive said “good luck” to the state if it wants to achieve this goal, with his main concern being the lack of heavy-duty electric vehicles.
