Ford CEO Jim Farley Talks EV Business Overhaul & Extended-Range Hybrid Vehicles

Podcast: Bloomberg Talks
Host: Matt Miller (Bloomberg’s Open Interest)
Guest: Jim Farley, CEO of Ford
Date: December 16, 2025

Episode Overview

In this episode, Bloomberg’s Matt Miller interviews Ford CEO Jim Farley about the company’s major shift in its electric vehicle (EV) strategy. The discussion explores Ford’s decision to scrap its next-generation all-electric F-Series truck in favor of hybrids and extended-range electric vehicles (EREVs), the financial and strategic implications of this overhaul, and Ford’s new ambitions in the energy storage sector. Farley addresses questions about the motivations behind these drastic changes, the partnership with Chinese battery technology, investor concerns, and competitive threats from China.

Key Discussion Points & Insights

Market-Driven Pivot to Hybrids & EREVs

• Customer preferences have shifted sharply toward hybrids, while expensive EVs are losing traction.
  • “We saw hybrids really take off last couple years... had 30% increase in our hybrid sales. We're now number three... 80% hybrid market share in trucks.” — Farley [01:04]
  • The U.S. EV market share dropped from 12% to just 5% in recent months.
• Ford is adjusting its product mix:
  • Scrapping plans for the next-generation all-electric F-Series (“T3 project”).
  • Shifting to more affordable and profitable hybrid and EREV models.

Financial and Operational Impact

• Ford is taking a $19.5 billion accounting charge due to the shift, with $5.5 billion in cash implications.
  • “The ROI on that five and a half billion is very attractive. These are great products. They're affordable. That's where the market is today.” — Farley [08:00]
• Profitability has improved and forecast raised:
  • EBIT forecast increased from $6–6.5 billion to $7 billion for the year.
  • Greater profitability expected from the new hybrid-focused vehicles.

New Product Strategy and Plant Investments

• Tennessee plant to produce an affordable pickup truck; Ohio plant to produce a more economical van.
  • Focus on proven, profitable segments and reliable customer demand.
• Broad hybridization of the Ford portfolio with more energy-efficient powertrains.

Entry into Energy Storage Business

• Ford is converting automotive battery plants to produce LFP (Lithium Iron Phosphate) batteries for energy storage.
  • Launching a major energy storage operation targeting utility and data center companies.
  • Kentucky 1 plant conversion to 20GWh energy storage capacity by late 2027.
• “We're going to be selling and servicing batteries... selling the huge storage containers to utility companies and data center companies in 27. We're already out there quoting this business.” — Farley [04:32]
• Collaboration with Chinese tech firms is a licensing agreement, not a partnership, and aims to keep manufacturing—and jobs—in the U.S.

Regulatory Environment & Consumer Choice

• Farley emphasizes alignment with revised CAFE standards and global regulatory shifts toward offering customer choice, rather than forcing exclusively all-electric vehicles.
• Ford is committed to a portfolio of EVs, hybrids, EREVs, and efficient gas vehicles.
  • “I think that's what the President is trying to do—just to give people choice.... It's going to be part of a broader portfolio with choice.” — Farley [05:49]

Competitive & Market Positioning

• Ford’s unique strength: deep connection to American truck/van buyers and manufacturing flexibility.
• New low-cost “Universal Electric Vehicle” (UAV) in Kentucky, designed to match Chinese costs:
  • “Our strategy... is to give people choice. Part of that choice is to have fully competitive costs with BYD localized in North America.” — Farley [10:30]
  • Confidence flows from aggressive cost reduction, re-engineering, and fast-track prototyping.
• Ford believes the Chinese “don’t know the truck customers like we do”—intends to leverage this advantage.

Notable Product Strategy Details

• Farley carefully avoids revealing sensitive details about body materials and other features for future models.
  • “If I tell you, Matt, I'm telling all my competitors, I'm not going to do that today.” — Farley [07:10]
• Raptor, hybrids, and EREVs exemplified as part of Ford’s broader powertrain and customer offerings.

Notable Quotes & Memorable Moments

• On scrapping next-gen EV trucks:
  “The EV market in the US went from 12% in the industry to only 5. And that really in the end was the big decider for us...” — Farley [01:32]
• On new product investment:
  “We're going to make in Tennessee now an affordable pickup truck. I think it's going to really surprise the market.” — Farley [02:07]
• On partnership concerns with China:
  “We have a licensing agreement. But we feel like it's better to build these batteries in the United States with American workers...” — Farley [03:37]
• On future profitability:
  “We've worked hard for the last couple years on this EV project and we have fully competitive cost with the Chinese. Now it's our chance to bring a pickup truck with that low cost EV to Americans.” — Farley [09:11]
• On U.S. manufacturing focus:
  “We're the most American car company. But even for us, as the most American car company, we're a global company.” — Farley [11:11]

Important Segment Timestamps

• 00:25 — Introduction and summary of Ford’s business overhaul
• 01:04 — Farley discusses what motivated the pivot away from pure EVs
• 02:24 — Financial implications and new product investments explained
• 03:25 — Addressing Chinese battery licensing and U.S. manufacturing
• 04:32 — Deep dive on Ford’s new energy storage segment
• 05:49 — Regulation, customer choice, and Ford’s diversified portfolio
• 07:10 — Product details, competitive confidentiality, and materials
• 07:48 — Investor-focused discussion of financial charges and outlook
• 09:11 — Long-term profitability of Ford’s EV business and new cost targets
• 10:30 — Competing with Chinese rivals and Ford’s localized innovation strategy

Summary

Ford is redefining its future with a sharp pivot toward hybrids and EREVs, dropping its next-gen all-electric F-Series ambitions amid a cooling EV market. CEO Jim Farley stresses that the move is driven squarely by customer preference and market realities. The strategy is also rooted in sound profitability, competitive cost structures, and leveraging Ford’s unique position as an American manufacturer with deep expertise in trucks and vans. Meanwhile, Ford jumps ambitiously into the energy storage sector—a move Farley describes as both profit-positive and good for American jobs. Throughout, the theme is flexibility, choice, and relentless focus on what U.S. consumers want, all while keeping an eye on formidable Chinese competitors.