FORD CEO Jim Farley issued a warning when he admitted that drivers will have to change their expectations of automobiles.
As Ford is moving toward an all-electric future, Farley emphasized that American As a result, consumers will have to make a big sacrifice.
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Americans are known for leaning towards cars with many kilometers of range and Farley claims that this type of expectation is not profitable for the types of cars it will manufacture in the future.
The Ford CEO was recently at the Aspen Ideas Festival where revealed that the manufacturer will launch a profitable $30,000 all-electric vehicle.
He explained that it is being developed by a secret company California“skunkworks” team based in .
Farley noted that Ford’s next generation of electric vehicles won’t be the oversized SUVs and trucks that Americans love the automaker for.
The Ford team is now moving towards more compact and affordable vehicles that can generate profits for the brand.
Because of this, American Ford lovers must overcome the need for vehicles with more than 300-400 miles of range, the Ford CEO explained.
“You have to make a radical change like [automaker] to get to a profitable EV,” Farley said.
“The first thing we have to do is really invest all of our capital into smaller, more affordable electric vehicles. This is the duty cycle that we have now discovered that actually corresponds,
“These big, huge, huge EVs, they’re never going to make money. The battery costs $50,000… Batteries will never be affordable.”
He said it is not only expensive for the company but also for the consumer.
Farley acknowledged that Americans must begin to lean toward purchasing smaller vehicles for the company to achieve profitability and compete with its Chinese car rivals.
“We have to start falling in love with smaller vehicles again,” he said.
“It is very important for our society and for the adoption of electric vehicles. We are simply in love with these monstrous vehicles and I love them too, but it’s a big weight issue,
“If we can’t make money with EVs, we have competitors who have the biggest market in the world, who already dominate globally, already establishing their supply chain around the world,
Why aren’t people buying EVs?
In January, many electric vehicle manufacturers reported sluggish demand. Rueters said there are a few valid reasons for the slowdown in demand:
- High initial costs. Many automakers, including Tesla, Hyundai and Ford, have carried out “price cuts” on their flagship electric vehicles to attract new buyers, even as demand remains sluggish.
- Higher insurance costs. Some insurers cite fire risks, high battery replacement costs and greater vehicle weight as reasons for higher premiums.
- Loaded anxiety. A large percentage of people remain afraid of finding themselves in a situation where they will not be able to charge if they run out of battery due to a lack of infrastructure.
- Range anxiety. In many cases, EVs still do not have the range and infrastructure of gas-powered vehicles.
- Poor performance at extreme temperatures. Reduced range in extremely hot or cold climates makes potential buyers wary.
Source: Reuters
“And if we don’t make profitable EVs in the next five years, what will the future be? We will only shrink in North America.”
Farley revealed that Ford is second in EVs behind Tesla.
The blue oval manufacturer has been in second place for two years, he admitted.
Ford’s CEO also said the automaker is in third place when it comes to hybrids, behind Toyota.
Although Ford is going electric, Farley says regulators “can’t just go all-electric.”
“They need to understand that customers will make this transition based on their work cycle, the way they drive, the number of vehicles they have at home,
“And the transition will happen.”
This story originally appeared on The-sun.com read the full story
