Ford CEO Jim Farley, the leader of the 122-year-old company that democratized the car for everyday Americans, said carmakers are facing three “perfect-storm moments” that could prove existential.
Ford has also seen its own declines in China, where sales fell to 288,000 in 2022 from a peak of 853,000 in 2016.
“They have the most subsidies from the government, plus their OEMs [original equipment manufacturers] are really good,” he told Rolling Stone.
Second, car companies are also facing the challenge of greater complexity thanks in part to the rise of EVs and a shift in engineering toward “software-defined vehicles,” according to Farley.
“The systems for safety, driver assistance, and controlling the vehicle, are so sophisticated and there’s so much software in the vehicles that are sensing devices,” he said.
These vehicles are much more complicated and expensive to build than traditional vehicles, and they require a different set of expertise than that which automakers have traditionally employed to build their vehicles.
“It didn’t take us long to learn that our internal combustion engine prejudice was so high that we actually hadn’t designed the cars right,” he told Rolling Stone.
Elon Musk’s carmaker thought about designing its vehicle differently, he added.
“They said, ‘Let’s design the vehicle for the lowest, smallest battery.’ Totally different approach,” he said.
The third and potentially largest storm, Farley said, is the regulatory whiplash that has accompanied the march toward lower carbon emissions.
“Everyone thought the first inning or the second and third inning would be pure electric vehicles,” Farley said.
“What that really means is, if there are no regulations, then every OEM is going to go back to their cultural norm,” Farley said.
Yet, Ford is hedging its bets. If emissions standards can change under Trump, it’s likely they will change under the next president.
So Ford moved away from its plug-in EV business and scrapped its F-150 Lightning in December. The company is betting its future on hybrids, extended-range EVs (EREVs), and a smaller, affordable EV platform.
“If we don’t put our chips on the right number and the right color, Ford could maybe not exist,” he said.
