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Ford Motor Company CEO Jim Farley has reversed his company’s stance on the possibility of producing EV battery cells for its electric cars. After former CEO Jim Hackett said Tesla’s strategy of producing its own lithium-ion batteries for electric vehicles had “no advantage”, Farley appears to recognize the positives of manufacturing cells and claims to be “absolutely” interested in using the same methods as the world leader in the electric car manufacturer.
Farley was speaking at a recent automotive conference hosted by Reuters when asked about Ford’s strategy for sourcing batteries and cellular materials. After a question pointing to Ford’s potential to manufacture their own cells instead of buying them from third-party suppliers, Farley replied, “Absolutely, we’re discussing it as a team.”
You might think Ford would expect to see how its first EVs perform in terms of sales and demand figures, but Farley believes there is enough evidence to start discussing the matter now. “We think it’s a natural time now because our volume is really growing,” he said.
Tesla’s battery strategy “has no advantage,” says Ford’s CEO
With Ford announcing the latest addition to its electric car fleet expected last Thursday when it introduced the E-Transit van, it now plans to produce three fully electric vehicles, such as the Mustang Mach-E and the E F-pickup. 150 joined the van. Ultimately, the decision to manufacture their cells at one of its manufacturing facilities will cut costs as procuring materials and building the batteries will reduce expenses. However, Farley is much more concerned with avoiding supply constraints than worrying about price.
“There are many other reasons besides the cost of making a move,” Farley added at the conference. Admitting that “there isn’t much flexibility to increase the capacity of batteries from third party suppliers,” Farley said, according to CNBC, Ford could expect a more committed move towards electrification. As more automakers plan to enter the electric vehicle market, many companies are likely to source EV batteries from suppliers such as Panasonic, making them less available and thus increasing costs. This will likely force automakers to raise the prices of their vehicles, making electric vehicles less accessible across the board for consumers.
As one of the largest automakers globally, Ford would likely see more advantages than disadvantages if it decided to make its own cells. Not only would it see lower prices, but it would avoid supply constraints, which would inevitably delay the production and delivery of vehicles.
This isn’t the first time a legacy automaker has criticized Tesla for the first time, only to reverse their stance later on. General Motors once claimed Tesla was “graveyard bound” due to its manufacturing strategies. A few years later, GM drew inspiration for a million-mile battery cell, similar to the one Tesla chased after several years.
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