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Who says a giant ship can’t be turned around quickly?
Speaking on a Q4 2024 earnings conference call this week, Ford CEO Jim Farley was keen to explain how determined he is to maintain the Blue Oval’s agility in developing new electrified products to match ever-changing consumer demand and regulatory environments.
Specifically, Farley sees EREV (Extended Range Electric Vehicle) technology as an ideal solution for buyers who want electric performance combined with low fuel cost and an affordable purchase price.
In what sounds like a tip of the hat to Toyota's current prime position in the global hybrid market, Mr Farley said, “We want to make sure that we have diverse powertrains and we’re going to invest.
“We’ve learned that when it wasn’t popular to invest in hybrids it turns out to be a good move.
“And therefore we want to lean into EREVs and other new powertrains to make sure that we go with the flow, so to speak, of the customers,” he said.
Farley called out light commercial vehicles as a specific focus, noting the Ranger in particular as “a successful global franchise”.
“A sweet spot that has emerged is small and medium-size trucks and utilities. And hybrid trucks are a key growth area for us.
“It’s not what you think about when you think of hybrids, but we’re deep in the development of our next generation of vehicles that we believe will be affordable, high-volume and great for our business”, he added.
In 2022, Ford established what it refers to as a 'skunkworks' team in California focused on changing the company’s approach to next-generation vehicle development while “bending the cost curve” on electric vehicles and Mr Farley believes “partial electric options” are key to the company’s future success.
“We are in the heart of our transformation at Ford.
“Ford will be developing flexible body-on-frame and unibody (skunkworks) platforms that will be designed for multi-energy powertrains that will be needed for affordability and range requirements.
“We’re really confident in our EV strategy because, believe it or not, most things that are happening are playing to our strengths.
“EVs are eight per cent of the US market and they’re growing and the satisfaction with the vehicles is higher than internal combustion.
“We’re going to make sure the EVs we produce are not me too products. That they play to our strengths. Yes, BEV and PHEV, but specially hybrid and EREVs”, he said.
Mr Farley is famously a fan of Li Auto’s Ideal Mega ranger-extender electric MPV, using a specially imported example as his daily driver in Detroit from late last year. And he sees direct parallels between its configuration and new Ford models.
“Americans love big cars. They love their big trucks. We drive these big vehicles but some people would love to feel that instant acceleration, they’d love to be able to drive by a gas station all the time.
“They love the feeling of electric but they just can’t get it. It’s $30-40,000 too expensive for these big vehicles.
“In an EREV, the batteries are so much smaller than these huge batteries in three-row crossovers.
“For customers, you’re able to buy an electric vehicle that’s fully comparable to an ice vehicle in terms of cost. No duplicate drivetrain components (in an EREV) means the incremental cost of fitting that internal combustion engine in there is very minimal for the customer.
“So, this technology gives them the electric experience, without the range anxiety,” he said.
It’s worth noting Ford's global EV sales fell 9.0 percent in 2024 (to 105,000 units) and its ‘Model E’ division, responsible for EVs, fell 35 per cent with domestic discounts widely offered on models including the Mustang Mach-E SUV and F-150 Lightning pick-up.
But Mr Farley made the point that at the same time Ford’s overall global revenue reached an all-time record A$294B last year, the fourth year-on-year improvement in top-line growth.
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