Ford Motor Co (NYSE:F) CEO Jim Farley said he believes automakers need to plow through challenges to make electric vehicles affordable for the average buyer, The Detroit News reported on Saturday, citing a live-streamed Detroit Homecoming VIII interview.
What Happened: Farley noted key issues like labor concerns and battery supply as some of the key hindrances to making electric vehicles affordable for automakers.
He said a key issue is how production will impact labor concerns since it costs 30% less to manufacture electrical vehicles. There also is an issue of battery supply and minerals such as lithium and cobalt to power them.
"We have to bring battery production here, but the supply chain has to go all the way to the mines. That's where the real cost is and people in the U.S. don't want mining in their neighborhoods," Farley said, as per the Detroit News.
“Average people cannot afford these vehicles and we have a lot of work to do to make them more affordable....that’s the one that keeps me up at night,” Farley said during the discussion at the annual event being held since 2014.
Why It Matters: Ford is expected to begin delivering the F-150 Lightning — the electric version of its most profitable and popular pickup truck— early next year at a ticket price of $39,974 onwards for the base model and a range of 230 miles.
Farley told the audience that F-150 Lightning has secured 150,000 orders and it is completely sold out in Europe, in the U.S, and in China.
Electric vehicle makers such as Tesla Inc (NASDAQ:TSLA), General Motor Co (NYSE:GM) and others are rushing to secure their supplies of key ingredients that go into making the batteries that can charge faster and last longer, including minerals such as lithium and cobalt.
With rising demand, lithium — one of the metals used in battery production — is being seen as the new oil. Though with all the potential that it brings, the metals are also mired in the environmental and sociological impact of mining, with several protests in the U.S. and Europe around the proposed mining.
Currently, nearly all of the global electric vehicle batteries are made by Asian companies like CATL, LG, Samsung and SK Innovation; industry experts estimate it will take years for the U.S. and Europe to catch up.
Copyright © 2021 Benzinga (BZ Newswire, http://www.benzinga.com/licensing). Benzinga does not provide investmentadvice. All rights reserved.
I find it incredible that the Ford CEO is asking himself these questions today and not 10 years ago. Clearly, Ford and GM are in a pickle. Today they don't make much more than pickup trucks and SUVs and any legislation at the state or federal level mandating the switch to EVs is forcing them to fundamentally change, something they aren't good at, both at the labor union and management levels, and they will do all they can to slow things down.
Vehicles in Europe are generally more expensive than in the US and gas a lot more expensive so EVs sold there are actually cheaper to own. In the US where compact cars are between $20-30k and gas is under $1 a liter, the EV proposition is more complex.
Certainly, the argument will inevitably turn entirely political and very ugly, with Republicans vowing to hang on to oil while Democrats will push for alt energies. We already see an increasing number of acts of aggression towards EVs and their drivers. The consequence is the liberal states will be mostly EVs while deep red states will remain mostly ICE for many more years than Europe. It will be interesting to see how much gas prices will fluctuate, considering there will be an oversupply to a dwindling demand and fewer stations to deliver gas. Eventually supply and demand will find their equilibrium and I expect Americans will discover gallon of gas at $10.
U.S. NEWS
Ford jolts auto industry with $11.4 billion investment in new electric vehicle, battery plants
"We're on the cusp of a revolution," Ford Executive Chairman Bill Ford tells "NBC Nightly News."
00:03 /02:24
Sept. 28, 2021, 7:00 AM +08
By
Corky Siemaszko
The Ford Motor Co. gave the auto industry a jolt Monday with word that it plans to spend $11.4 billion on new production sites in Tennessee and Kentucky where it plans to build electric pickup trucks and cars — and the batteries to power them — on a massive scale.
It will also create 11,000 jobs in the two states that have struggled to recover from the collapse of the coal industry.
The audacity of Ford’s massive investment in electric vehicles was not lost on Ford Executive Chair Bill Ford.
“If my great-grandfather saw our industry five years ago, it would be very recognizable to him, it hadn’t changed a lot,” he said of the Ford founder, Henry Ford, in an interview with Tom Costello of "NBC Nightly News."
“There were a lot of evolutions, but no revolutions. Now we’re on the cusp of a revolution. It’s not just the electrification, although that’s a huge piece of it.”
It’s also a chance, Ford said in a statement, to “achieve goals once thought mutually exclusive — protect our planet, build great electric vehicles Americans will love, and contribute to our nation’s prosperity.”
Of those new jobs, 6,000 are destined for what’s being called the Blue Oval City campus in Stanton, Tennessee, a $5.6 billion megacampus where electric versions of the popular F-series pickup truck will be manufactured, along with electric batteries.
This new assembly plant “is designed to be carbon neutral with zero waste-to-landfill once fully operational,” Ford said in a statement.
“This is a watershed moment for Tennesseans as we lead the future of the automotive industry and advanced manufacturing,” Tennessee Gov. Bill Lee, a Republican, said.
The remaining 5,000 new jobs are heading to Glendale, Kentucky, and the $5.8 billion BlueOvalSK Battery Park, where batteries to power the “next-generation electric Ford and Lincoln vehicles” will be manufactured at two sites on the campus starting in 2025.
“This is the single largest investment in the history of our state,” Kentucky Gov. Andy Beshear, a Democrat, said. “Never again will we be thought of as a flyover state. Our time in now. Our future in now.”
Ford said the United States doesn’t have a big battery manufacturing industry, and there was a reason why his company decided to establish a “beachhead” in two states where coal was once king.
“The one thing that also attracted us to both Tennessee and Kentucky is the workforce,” he said. “They both have really good workforces and are willing to be trained to do these jobs and that was a big consideration.”
Tennessee and Kentucky are so-called
right to work states where workers aren’t required to join unions as a condition of employment.
The company is also setting aside another $525 million to train the technicians across the country who will work to service its new fleet of electric-powered vehicles. Of that training money, $90 million will be spent in Texas alone.
Ford projected that by 2030, some 40 percent of his company's vehicles will be electric. He vowed to make believers out of the skeptics who fear a switch to electric from internal combustion engines means sacrificing power.
“I actually don't think it'll be that hard once, once they see what these vehicles can do,” Ford said. “For instance, they're faster than lightning, so to speak off the line, they're very quick, faster than anything else that's out there.”
The new battery-powered
Ford Mustang Mach-E, which can go from zero to 60 mph in 3.5 seconds, is going to be road-tested by the Michigan State Police, he said.
Also, Ford said, there are some things an electric vehicle can do that a gas-powered ride can’t do.
“For instance, it can be a
backup generator for your house,” he said. “If you lose power, you plug your house into your (F-150) Lightning and you can power your house up to three days. Also, it can be a portable generator at worksite.”
Costello asked Ford what his great-grandfather would think of “your new Model T for the 21st Century.”
“I think he’d say, ‘What took you so long?'” Ford replied.
. Good guess though! My prediction is still valid, Tsla is hitting 780 at time of this writing, on its way to my targeted 800 between 9/28 and 11/17, per earlier post.
