According to Ford Chief Executive Jim Farley, electric vehicles (EVs) are not expected to reach cost parity with internal combustion engine (ICE) vehicles until after 2030. Farley made this statement during an investor conference, mentioning that EVs will continue to be more expensive than their ICE counterparts until the production of second and third-generation vehicles commences after 2025.
Farley anticipates that between 2030 and 2035, significant cost savings for EVs will come from reduced labor content due to simpler manufacturing processes and fewer parts. Additionally, smaller batteries that utilize cheaper materials will contribute to cost reductions. Farley also foresees lower distribution costs resulting from the online sale of EVs and increased revenue from software-driven digital services.
Ford’s software services business has experienced substantial growth, with 600,000 subscribers, triple the number from a year ago. Among these subscribers, 200,000 are retail customers who pay for the Blue Cruise driver assistance system, while 400,000 are Ford Pro commercial customers who pay for various services, including fleet management, EV charging, and dynamic routing.
As Ford expands its data collection capabilities from vehicles and drivers, Farley believes that offering insurance could be a natural progression for the company. In response to inquiries regarding potential industry consolidation, Farley instead predicts an “acceleration of cooperation,” citing Ford’s recent agreement to utilize Tesla’s supercharger network for its future EVs. He emphasizes the importance of cooperation, particularly for companies lacking the resources to establish a complete EV ecosystem.