Ford CEO Jim Farley Foresees Intensified Competition Against Chinese Electric Vehicles in 2024

According to The Detroit News, Ford’s CEO Jim Farley expressed his thoughts on last year’s United Auto Workers (UAW) strike and electric vehicles at the Wolfe Research Global Auto and Auto Tech Conference held in New York on February 15, 2024. He reportedly said the company always took pride in its relationship with the UAW, having avoided strikes since the 1970s. But Ford’s profitable plant in Louisville, Kentucky, was shut down last year due to a UAW strike.

Farley said Ford decided to build all of its highly profitable big pickup trucks in the U.S., and by far, it has the most union members — 57,000 — of any Detroit automaker. He said this came at a higher cost than competitors, who built truck plants in Mexico. But Ford thought it was the “right kind of cost,” he emphasized.

He also mentioned that Ford is progressing in cost savings through cultural and structural changes within the company. It expects to take out $2 billion worth of costs this year, and Farley said he thinks cuts in manufacturing costs will “fully offset” the price of the UAW contract, he added.

Regarding electric vehicles, Ford concentrates on smaller, lower-priced EVs and electric work vehicles such as pickup trucks and full-size vans, Farley said. The company is developing the underpinnings of a less costly smaller vehicle, which Farley said would be profitable because of U.S. federal tax credits as high as $7,500 per vehicle. He said Ford’s next generation of electric vehicles would come in 2025 through 2027.

Farley also predicted a drop in EV battery prices due to intensifying competition. He added that the company can go to common cylindrical cells that could add a lot of leverage to our purchasing capability.

Ford’s electric vehicle division, Ford Model E, had a pre-tax loss of nearly $5 billion last year. Despite this, it still recorded a net profit of $4.3 billion, thanks to significant earnings from the commercial vehicle division and the internal combustion engine vehicle division, Ford Blue.

He also predicted that competition against Chinese electric vehicles will intensify this year. He cited the fact that Chinese electric vehicles are encroaching on the market at a rapid pace, with the market share reaching 10% in Europe.