As automakers shift their electric vehicle strategies to better accommodate buyers' cravings for hybrid-EVs, Ford (F) CEO Jim Farley says that his company is seeing the segment become more profitable than its gas-guzzlers, but is keen on adopting some revolutionary technology that is powering some cars that are popular in China.
Speaking at the Bernstein Annual Strategic Decisions Conference, the Ford CEO noted that the automaker's hybrid models have become more profitable than its equivalent gas-powered cars, as EV adoption rates falter.
"A year ago, we weren't covering the cost premium for hybrids with the price that customers paid us. We are now," Farley said. "Customers are voting. They like these in-between solutions."
According to Farley, the hybrid model of the company's most popular and most profitable product; the F-150 pickup truck, accounts for 25% of its sales. Additionally, he said that every North American Ford nameplate will have a hybrid version by 2030.
However, the Ford CEO is not keen on seeing increased hybrid sales as an in-between solution that will go away once EVs become popular again.
"I think we should stop talking about [hybrid cars] as transitional technology on the powertrain side," Farley said. "It's 25 years old now."
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Farley's Chinese-inspired solution for range anxiety:
BYD
Fresh off a 10-day trip to China, the Ford CEO noted of a very interesting solution for EVs that are being used in some very popular vehicles sold in the country — one that seems to be very compatible with how Americans drive.
These vehicles are called EREVs, or Extended Range Electric Vehicles. To sum it up in the most basic terms, these are fully-electric vehicles that contain an onboard generator (usually a gas engine) that charges the battery whenever needed; extending its range.
With this solution, Farley argues that a much smaller, cheaper battery can be used, which translates to cost savings and convenience that can be passed on to the customer.
"EREVs in the U.S. could be 120 miles of all-electric, and they drive like EVs," Farley said. "They don't drive like combustion engine vehicles, so you get an EV, and you have 700 miles of range. You don't have range anxiety for a long trip. You don't have to rely on any charges. And those vehicles have half the batteries, so they're very profitable."
"It's a good solution, that's why it's popular in China, that's why it's doubled its sales in China and we really like that solution."
The fitness test for automakers, he says, will be to see how fast automakers like his quickly adopt such a technology, but one of its biggest competitors is already cooking up something very similar to what Farley described.
Related: Stellantis' new electric pickup provides a cure for range anxiety
Stellantis
In November 2023, Stellantis (STLA) brand Ram Trucks revealed the Ram 1500 Ramcharger, an EREV that can provide up to 690 total miles of range.
Though it is powered by two electric motors providing 663 horsepower to the wheels, it is supported by a 3.6-liter Pentastar V6 engine that is not mechanically connected to the car in any way, shape or form. Instead it activates whenever it is needed, running quietly in the background to power a 130kW on-board generator that charges its on-board 92kW battery.
Stellantis
“There’s no connection between this generator assembly and the wheels, like one might find in even a plug in hybrid — all of the propulsion is electrical,” Ram Trucks chief engineer Doug Killian said in a statement. “And that’s really important to that story of this being an electric vehicle.”
But like most good things, all the fun and magic of the EREVs will be up to the scrutiny of government regulators, who would be hesitant to classify it as a zero-emissions vehicle like most run-of-the-mill BEVs like Ford's F-150 Lightning; even though most trips can be achieved using just the juice from the batteries and the electric motors.
"We're going to have to talk to all the regulators," Farley said, "because they really bet on pure EVs, but EREVs in China are really the growing part of the EV market."
Ford, trading under F on the New York Stock Exchange, finished the day up 1.82%, trading at $11.77 at market close May 30.
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