“We should stop talking about this as transitional technology”. The phrase was said by Jim Farley, CEO of Ford Motor Companyin reference to the hybrid cars that combine an internal combustion engine with an electric one to reduce CO2 emissions into the atmosphere, thanks to a fuel saving of approximately 50% compared to what a conventional vehicle would have.
He did it in “Bernstein 40th Annual Strategic Decisions Conference 2024″in which he also participated his General Motors counterpart, Mary Barra, and in which both delved deeper into current and future mobility solutions, showing their capacity for self-criticism and the determination to make bold decisions because they consider them necessary and timely. So much ford as General Motorswere two of the generalist companies that most quickly made the decision to pivot towards electric mobility three years ago, when governments around the world began to become aware of the need to achieve carbon neutrality by 2050.
However, in the last year, the first economic objectives were not met At a general level because sales, although they did not decrease, the speed with which they were growing slowed down. This implied a change of scenario for electric car manufacturers, many of which made decisions to adjust their projections. None has thought about stopping producing battery-powered cars, nor does anyone deny that they are part of the future, but for many executives, They are not necessarily the only way to develop sustainable mobility.
Ola Källenius, CEO of Mercedes-Benzsaid a few weeks ago that cost parity between electric and conventional cars is still far from being a reality, and sees it as something “still very far away”. That was a reaffirmation of something that can be appreciated even with tesla, the brand that is considered the emblem of electric cars in the world, and that still cannot launch the famous and long-awaited battery-powered car for less than $25,000. In fact, several voices close to the company Elon Musk They assure that the project is stopped and without a restart date.
Ford, in fact, decided to divide its company into three different businesses starting in 2022, leaving the electric car division separated from the thermal vehicle division, while the commercial units division also has its own division. This allows them to be analyzed separately. running of business independently. Thus, it was learned that the electric car division reported a loss of $4.7 billion in 2023while the company itself has forecast an even higher one, between 5,000 and 5,500 million for this year, says Reuters.
The problem is the same as always. Electric cars are still very expensive for the average car user’s pocket, and although government aid still exists to subsidize part of that price differential, these bonuses are being progressively withdrawn because they were born to promote change and not to be sustained over time. It is, in some way, the same thing that is happening in Argentina with discounts and benefits that brands and dealerships offer today to sell cars to a market that is depressed by the economic crisis.
However, what Ford’s global CEO is proposing goes one step further. Electric cars are not only inconvenient for users, but also for the manufacturers themselves.
As reported -, Farley said that “Many of our hybrids in the United States are now more profitable than their non-hybrid counterparts. Plug-in hybrids, which include a small battery that can be used for shorter distances, may not be relevant in a few years. However, the extended range hybrids “They are an important technology for the future of the industry.”
Bar, on the other hand, held a different position in the final approach, although with a coincidence in the situation. The CEO of GM said that the bow brand It will also have plug-in hybrids from 2027, although in response to stricter regulatory requirements regarding polluting emissions. However, the long-term view remains that the market is heading towards electric vehicles.
In relation to hybrids, Barra said that “It is not the final goal because it is not about zero emissions. “We are trying to be very smart about how we do it and how we use the capital there,” he added.
Both Farley and Barra agreed, however, in pointing out that the subscription services and autonomous driving They will be key to the profitability of automotive companies. However, to be competitive in those areas, Farley believes you have to look very carefully at what is happening in China.
“Chinese competitors have been superior in its approach to developing software and services that attract customers. You have to have good physical condition and quality fitness to even have the right to compete. And that is not defined here in the United States, but in China,” added the Ford CEO.
Barra, for his part, assured that “I take Chinese competitors very seriously, especially the main ones. We have to continue reducing costs to be able to compete successfully”.
These statements come within the framework of the strong impact that the decision of the administration of Joe Biden of quadrupling tariffs on electric cars from China, as a way to protect North American manufacturers, and the possible secondary consequences that this could generate if a new conflict is declared with the Asian giant, since currently, it is still the leading supplier of lithium batteries in the world.
