Ford CEO Admits “Our EV’s are not good” - The Chinese WILL come & The Germans are in trouble!

Summary

In an insightful interview, Ford's Jim Farley discusses the challenges faced by legacy automakers in transitioning to electric vehicles (EVs), particularly in China. He acknowledges Tesla's pioneering role and the need for profitability in EV production within five years. Farley reveals Ford's strategy to compete with Chinese EVs, including the development of a new generation EV costing around $30,000, set to launch in 2027. The discussion also touches on the implications of tariffs, data privacy concerns, and the importance of establishing a domestic battery supply chain, highlighting the urgency and complexity of the automotive industry's EV evolution.

Takeaways

• 🚗 Jim Farley, Ford's CEO, emphasizes the urgency for legacy automakers to transition to electric vehicles (EVs) and achieve profitability within the next 5 years to remain competitive.
• 🔄 He acknowledges the current EVs from Ford are not as competitive as they should be, admitting to losing $5 billion annually on their current EV models.
• 🌏 The Chinese EV market is rapidly expanding, with China producing 70% of the world's electric vehicles and controlling a significant portion of the battery supply chain.
• 💡 Farley highlights the importance of battery technology innovation, such as the use of LFP (lithium iron phosphate) chemistry, which is more cost-effective and safer.
• 🛠️ Ford is creating a 'Skunk Works' team to develop the next generation of EVs with a new approach to vehicle assembly, inspired by Tesla's methods.
• 💰 Ford aims to release a new EV in 2.5 years with a target price of around $30,000, hoping to be profitable and competitive with Tesla's and Chinese EV manufacturers' offerings.
• 🛂 Farley discusses the impact of potential tariffs on Chinese EVs and the need for a level playing field, while also recognizing the inevitability of Chinese EVs entering the US market.
• 🔒 Data privacy and security concerns are raised regarding Chinese EVs, with the potential for the Chinese government to access sensitive information through vehicle cameras and systems.
• 🤝 Elon Musk and Tesla are credited with pushing the EV industry forward and setting an example for manufacturing innovation and profitability.
• 🔄 Tesla's approach to constant innovation and production line adjustments gives it a significant edge over competitors who are not structured for such agility.
• 🚚 The Biden administration's policies, such as the Inflation Reduction Act (IRA), are seen as incentives for domestic EV and battery production, potentially influencing Ford's strategy.

Q & A

What is the main topic of the interview with Jim Farley on NBC?

The main topic is the shift towards electric vehicles (EVs), the challenges faced by legacy automakers, particularly German companies, in the Chinese market, and the inevitability of Chinese automakers entering the US market.

What does Jim Farley believe is necessary for legacy automakers to survive the shift to EVs?

Jim Farley believes that legacy automakers need to achieve profitability with EVs within the next five years and make radical changes as an OEM to get there.

What is the significance of the next generation EV from Ford that Jim Farley mentioned?

The next generation EV from Ford is significant because it is expected to be released in 2 and a half years and is aimed to cost about $30,000, which is a strategic move to compete in the EV market.

What does the speaker suggest about the current state of German automakers in China?

The speaker suggests that German automakers are struggling in China as they are unable to keep up with the Chinese EV makers, and they risk losing a significant portion of their profits if they fail to capture the Chinese EV market.

How does the speaker describe the Chinese EV market's current advantages?

The speaker describes the Chinese EV market as having a significant advantage due to its control over battery processing, unique battery chemistry like LFP (lithium iron phosphate), and government sponsorship of companies.

What is the 'Skunk Works' project that Jim Farley mentioned, and why was it created?

The 'Skunk Works' is a project created by Ford to develop the next generation of EVs in a completely new way, separate from the traditional Ford operations, with the aim to compete against Chinese EV players.

What does the speaker suggest about the impact of tariffs on Chinese EVs entering the US market?

The speaker suggests that while tariffs might act as speed bumps, they cannot stop the Chinese invasion of the US market, as Chinese companies are already establishing a presence in Mexico and will eventually bypass tariffs to enter the US market.

What is the significance of Tesla's approach to vehicle testing, as mentioned in the script?

Tesla's approach to vehicle testing, where every single vehicle tests itself and diagnoses any issues, is significant because it represents a shift in quality control and is a precursor to Tesla's full self-driving system.

How does the speaker view the potential competition between Ford's $30,000 EV and Tesla's upcoming affordable vehicle?

The speaker believes that even though the price points might be close, Tesla's vehicles will likely offer more innovation and profitability, making Ford's EV less competitive despite the similar price range.

What is the speaker's opinion on Tesla's potential entry into the commercial vehicle segment?

The speaker disagrees with Jim Farley's view that Tesla will not enter the commercial segment, stating that Elon Musk has expressed intentions to have a vehicle in every category, including a van.

What challenges does the speaker highlight that legacy automakers face in transitioning to EVs?

The speaker highlights that legacy automakers face challenges such as the need to rethink their manufacturing processes, the competition from Chinese EV makers, and the financial losses they are currently incurring with their EV models.