Ford's CEO Discusses Tariffs and New Extended-Range Vehicles | Carscoops

      Affordable electric vehicles (EVs) are in development, although tariffs could hinder progress.

      In a recent earnings report, Ford outlined its strategy for range-extended vehicles as part of its multi-energy approach. CEO Jim Farley noted that large electric crossovers may not be viable due to their significant battery requirements. Ford registered a net income of $5.9 billion in 2024 but anticipates challenges in the current year.

      During the earnings call, Farley emphasized the importance of hybrid trucks for growth, highlighting features like Pro Power Onboard that transforms pickups into mobile power sources suitable for job sites, camping, or emergencies.

      Farley mentioned that automakers are increasingly adopting hybrids, expecting substantial growth in this area, especially within the truck market. He pointed out that customers are realizing that hybrids can provide excellent towing capacity, torque, payload, and fuel efficiency.

      While the uptake of electric vehicles has been slower than anticipated, Farley remains optimistic, stating that Ford is actively developing a new generation of vehicles that will be affordable, produced in higher volumes, and beneficial for business. He identified the "sweet spot" in the U.S. market as small to medium-sized trucks and crossovers, typically used for commuting or as secondary vehicles—essentially, those not utilized for long-distance travel. According to Farley, these vehicles can benefit from smaller, less costly batteries, allowing for lower prices and potentially increasing adoption rates.

      Conversely, Farley expressed concerns about the economics of large electric utility vehicles, stating that they have "unresolvable" economic challenges. Although competitors like Hyundai and Kia may disagree, Ford decided to discontinue their three-row electric crossovers in 2024. Farley criticized the poor aerodynamics and hefty battery costs of large electric crossovers, suggesting that customers are unlikely to pay a premium for such vehicles. A quick search reveals that numerous Kia EV9s are available at over $10,000 discounts, supporting his argument.

      A noteworthy update is Ford's intention to embrace range-extended vehicles, a path already taken by Stellantis with the Ram 1500 Ramcharger. Farley believes this is a positive direction, highlighting that such vehicles can achieve over 700 miles (1,127 km) of total range while primarily operating in electric mode. This provides customers with an electric experience devoid of range anxiety, along with a cost structure comparable to internal combustion engine vehicles.

      Farley explained that range-extended vehicles could use smaller batteries with around 150 miles (241 km) of range due to the inclusion of an onboard generator. This contrasts with traditional EVs, which require larger, more expensive batteries to reach 300 to 350 miles (483 to 563 km) of range—a difference that, while seemingly small, represents significant cost savings, potentially amounting to tens of thousands of dollars.

      With this in mind, Ford is considering extended-range powertrains for select vehicles as part of its broader multi-energy strategy aimed at providing a diverse range of options to consumers.

      Farley also touched on the potential impact of a looming global trade war, indicating that a 25% tariff on Canada and Mexico could devastate the industry, wiping out billions in profits over time. He affirmed that consumers would face higher prices as a consequence.

      As for the company's financial performance in 2024, revenues rose by 5% to reach $185 billion. However, the electric Model e division reported a loss of $5.1 billion, reflecting the high costs associated with developing electric vehicles and constructing battery plants.

      Despite the significant EV loss, Ford declared a first-quarter regular dividend of $0.15 per share, along with a supplemental dividend of $0.15. Nevertheless, the outlook for 2025 appears less encouraging as headwinds are anticipated.