{"id":23754,"date":"2022-06-03T12:03:54","date_gmt":"2022-06-03T16:03:54","guid":{"rendered":"http:\/\/autosector.com\/?p=23754"},"modified":"2022-06-03T12:03:54","modified_gmt":"2022-06-03T16:03:54","slug":"1136061_ford-ceo-ev-price-war-china-industry-consolidation","status":"publish","type":"post","link":"http:\/\/autosector.com\/?p=23754","title":{"rendered":"Ford CEO anticipates EV price war, shakeout to favor China, and industry consolidation"},"content":{"rendered":"

Ford CEO Jim Farley sees the automotive industry \u201cheaded to a huge price war,\u201d with the idea of \u201cdemocratized EVs\u201d coming soon.\u00a0<\/p>\n

<\/strong>The comments were made within a conversation with analyst Toni Sacconaghi, as part of Bernstein’s 38th Annual Strategic Decisions Conference<\/a> held earlier this week.\u00a0<\/p>\n

<\/strong>In it, Farley took a few positions that are likely to give some of the Detroit establishment heartburn\u2014like how the auto industry is about to be rattled by price pressures, a shakeout that could favor China, and a potentially abrupt consolidation of vehicle makers.\u00a0<\/p>\n

\"Ford<\/p>\n

Ford CEO Jim Farley<\/p>\n<\/div>\n

\u201cThe old OEMs absolutely will get consolidated,\u201d said the Ford CEO. \u201cMany of the small players cannot afford to make this transition; many of them are not investing in embedded software and electric architectures, which is the heart of this transition.\u201d<\/p>\n

Operating cost over sticker price<\/strong><\/p>\n

<\/strong>Tesla CEO Elon Musk earlier this year said that the company isn\u2019t working on the $25,000 Tesla<\/a> it focused its entire Battery Day presentation around in 2020, suggesting that robotaxis will make it less important<\/a>.\u00a0<\/p>\n

<\/strong>Farley followed with a version of that position, saying future Ford products might not be based around the lowest material costs (and sticker price), but around optimizing the total ownership cost. And that might be for a completely different use model.\u00a0<\/p>\n

\"2021<\/p>\n

2021 Ford Mustang Mach-E<\/p>\n<\/div>\n

Nobody has yet built a product for the 1.3 million Lyft and Uber drivers optimized for low operational costs, he noted. Although there\u2019s one exception to that we should point out: UK\u2019s Arrival<\/a>, which showed a prototype of an electric MPV late last year.<\/p>\n

Meeting Chinese makers on margins<\/strong><\/p>\n

<\/strong>Some of the Chinese EV makers are managing higher margins with lower prices. Farley pointed to the lithion-iron phosphate battery chemistry<\/a>\u2014and its cost of about 20% less than other lithium-ion chemistries\u2014as one possibility to help get there. But he underscored that the simplification of labor content is going to be a big aspect for cutting cost.\u00a0<\/p>\n

Reengineering of vehicles will aid efficiency and thus help minimize the size of battery packs. He has suggested that’s already underway in the Mustang Mach-E<\/a>, incrementally.<\/p>\n

\"2021<\/p>\n

2021 Ford Mustang Mach-E electric powertrain<\/p>\n<\/div>\n

We\u2019ll also see more optimization for aerodynamics. A full-size pickup truck optimized for aero, versus an F-150 Lightning, means 75 miles in additional range, Farley seemed to suggest, adding that \u201cit\u2019s kind of too bad that the Lightning ends up being our most successful vehicle today because it feels so derivative from the F-Series.”<\/p>\n

<\/strong>\u201cIt\u2019s not our only truck and the other trucks won\u2019t look anything like it,\u201d he added\u2014perhaps referring to the full-size electric truck for \u201cincredibly high volume\u201d<\/a> due in a few years.\u00a0<\/p>\n

Direct to consumer, no inventory: What dealerships?<\/strong><\/p>\n

<\/strong>The top executive also isn\u2019t convinced Ford needs public advertising for the vehicles developed and sold under its Model E business<\/a>. He added that Ford should be doing experiential marketing like vehicle birthday updates rather than Super Bowl ads.\u00a0<\/p>\n

\"Ford<\/p>\n

Ford Mustang Mach-E GT Performance Edition<\/p>\n<\/div>\n

Farley also says that Ford needs to go to non-negotiated pricing<\/a> and 100% online, with no inventory, and direct-to-consumer pickup and delivery.\u00a0<\/p>\n

<\/strong>Parsing that point, Farley isn\u2019t talking about getting rid of dealers but making them something completely different than what they are now. \u201cWe\u2019re working with our dealers as we speak through this,\u201d said Farley. Although on the commercial side, the CEO noted that dealers \u201cwind up being our strongest thing.\u201d<\/p>\n

<\/strong>Ford retailers will become more specialized, with \u201cmultiple tiers of dealers,\u201d and a plan to use the physical presence of dealerships to outperform Tesla.\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

Ford CEO Jim Farley sees the automotive industry \u201cheaded to a huge price war,\u201d with the idea of \u201cdemocratized EVs\u201d coming soon.\u00a0 The comments were made within a conversation with analyst Toni Sacconaghi, as part of Bernstein’s 38th Annual Strategic Decisions Conference held earlier this week.\u00a0 In it, Farley took a few positions that are […]<\/p>\n","protected":false},"author":1,"featured_media":23755,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[4],"tags":[],"class_list":["post-23754","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-e-cars"],"_links":{"self":[{"href":"http:\/\/autosector.com\/index.php?rest_route=\/wp\/v2\/posts\/23754","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/autosector.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/autosector.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/autosector.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/autosector.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=23754"}],"version-history":[{"count":0,"href":"http:\/\/autosector.com\/index.php?rest_route=\/wp\/v2\/posts\/23754\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/autosector.com\/index.php?rest_route=\/wp\/v2\/media\/23755"}],"wp:attachment":[{"href":"http:\/\/autosector.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=23754"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/autosector.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=23754"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/autosector.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=23754"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}