Ford Motor CEO Jim Farley on Friday touted the automaker’s electric-vehicle strategy, telling CNBC the company intends to strongly compete in the growing market segment.
Farley’s comments on “Squawk on the Street” came one day after Ford reported better-than-expected fourth-quarter earnings. As part of that announcement, Ford said it’s increasing its electric-vehicle investment to $22 billion through 2025, almost double what it had previously pledged to spend.
Shares of Ford were higher by 2.7% during Friday’s session to roughly $11.70 apiece.
“We’re not going to cede the future to anyone,” Farley told CNBC’s Phil LeBeau. “Our electric strategy is very specific. We’re going to invest in segments where we’re the dominant player and we have scale, like the F-150, the Transit van, our Mustang.”
While Ford is committing new capital for the years ahead, Farley said the company’s EV transition is yielding results now and pointed to the fact its all-electric Mustang Mach-E crossover has hit showrooms. He said he considers the Mach-E a “credible competitor” to Tesla‘s compact SUV known as the Model Y.
Ford’s all-electric Transit van is expected to arrive late this year, Farley noted, 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 as chief executive Oct. 1.
The charging port for the Ford E-Transit van is located in the vehicle’s grille.
Wall Street’s focus on electric vehicles has been increasing. A number of players in the space, including battery makers and charge-station companies, have gone public in recent months. Ford’s crosstown rival General Motors also has been catching the Street’s attention for its aggressive investments in electric vehicles. GM said last week 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 turnarounds, not just in the auto industry, but in business.” GM shares are up more than 100% in the past six months, while Ford’s stock is up more than 65% in that same stretch.
As production and adoption of electric vehicles grows, some have raised concerns that there could be a battery shortage. Farley acknowledged that as Ford ramps up EV manufacturing, the company “has to secure [battery] supply so we don’t get into a situation like we are in chips.” Ford had to temporarily reduce F-150 production in response to an ongoing semiconductor shortage that’s hitting the global automotive industry.
“That’s going to come down to every manufacturer making the commitment,” Farley said. “We have our own decisions to make on vertical integration. Our $22 billion [EV investment] does not even include that. You could expect more news from us on that vertical integration.”