Ford CFO: Cheaper EVs Will Be ‘First Inflection Point’
The future of electric vehicles lies in smaller, more affordable models, Ford Motor Co. CFO John Lawler said March 26, adding to thoughts the automaker’s CEO Jim Farley sketched out nearly two months ago.
Speaking to the Bank of America Securities 2024 Automotive Summit, Lawler said Ford will continue to make some large EVs—the company’s F-150 Lightning was the U.S.’ top-selling EV pickup truck in 2023 with nearly 24,200 units—but added that their number will be limited. The Ford team’s sights, he said, are fixed on competition from Chinese manufacturers as well as Tesla Inc. and the smaller vehicles they have developed or are planning to roll in out the next few years.
“We don’t believe the game is going to be really fought and won with larger vehicles,” Lawler said. “The first real inflection point is going to come when some of the lower-priced EVs come online.”
Farley and Lawler are banking on a team of engineers in California who, under the leadership of Tesla veteran Alan Clarke, are developing a platform for a range of smaller EVs that will need fewer batteries and thus be lighter and cheaper. The platform, Lawler said to the BofA audience, will create “a lot more degrees of freedom” and open the door to manufacturing vehicles with the interior room of today’s Explorer SUV but having the overall footprint of the smaller Escape crossover. The ability to place different “top hats” on the future platform—which doesn’t yet have a delivery date—will be a key selling point.
“That’s how we’re thinking about it,” Lawler said. “I know it’s a little bit opaque because we haven’t introduced the vehicle and we need a little more time before we do that.”
Looking more broadly at the auto industry, both Lawler and Paul Jacobson, his finance counterpart at General Motors Corp., told the BofA Summit attendees that demand for their products has held up well so far in 2024. In addition, they said, pricing also have been firm, defying for now the expectations of both companies’ leaders, who have said they expect average prices to slip about 2.5% in 2024.
“I would rather be on the side of the coin where we’re building a plan on some pricing degradation and not seeing it than the opposite side,” Jacobson said. “I think also, you’ve got to go back to COVID and the semiconductor [shortage], et cetera. I think we learned a lot about ourselves. I think the industry learned a lot about itself as well in terms of how do we manage inventory and production and how do we respond quickly to changes in demand.”
Shares of Ford (Ticker: F) fell more than 3% March 26 to $12.44 while GM stock (Ticker: GM) gained 1% to close at $44. Over the past six months, Ford is essentially flat while GM has followed the broader market higher, climbing about 35%.
