Ford CEO Jim Farley speaks with Yahoo Finance's Seana Smith about the unveiling of the F-Series Super Duty trucks, production in the Midwest, supply chain issues, finding enough workers, the cost of EV materials such as lithium and nickel, electric vehicles, and competition with Tesla.
BRIAN SOZZI: Locking in on shares of Ford today after it unveiled its F-Series Super Duty pickup truck on Tuesday. Yahoo Finance's Seana Smith had the chance to sit down with CEO Jim Farley after the reveal, and she joins us now. Pretty cool truck there, Seana.
SEANA SMITH: It was really cool. Lots of excitement last night during this big unveil. We know Super Duty is very important here to Ford, part of it's obviously very profitable F-Series pickup trucks, Super Duty accounting for just over 50% of the commercial vehicle market. So I got a chance to ask Jim Farley about the unveil, the growth opportunities there, as well as, obviously, inflation and supply chain concerns that have been plaguing Ford now for months. So let's take a listen to what he had to say.
JIM FARLEY: Well, Super Duty is-- if it was a separate company, it would have a revenue of a Fortune 500 company. So this is- this and F-Series are our most profitable vehicles globally. We make it for the tradesmen, plumbers, electricians, first responders, so it's very important for our country. And, boy, do they love technology. So we put a lot of cool new tech in the truck.
SEANA SMITH: And you're doing this announcement. You're unveiling the truck down in Kentucky. Ford has very, very strong ties in Kentucky. You've actually been producing trucks there since the Model T. What's the feeling down there? What's the feedback that you're getting from employees today?
JIM FARLEY: It's all good, actually. We're adding hundreds of new jobs. We're investing another 3/4 of a billion dollars for this new truck. We announced almost $6 billion investment in battery plants in Kentucky last year. So people are feeling good. I mean, we're all kind worried about the economy.
But for our customers, and also for our employees, you know, this is a really important day. We've invested a lot in this new truck. It's America's most popular heavy duty pickup. And we've been number one for, like, 40-plus years. So, you know, it's a lot of optimism, which is great to see.
SEANA SMITH: Jim, you mentioned $700 million in funding, adding 500 jobs. What has the hiring environment been like for you? Of course, there's been a massive labor shortage. Are you able to find the workers that you need?
JIM FARLEY: Yes, but it's very difficult. We've-- we've had to make a lot of changes to our payment plans, especially for our temporary workers. We've moved a lot of them to permanent, so they have more opportunity. The biggest issue we're seeing is not at Ford, but it's their suppliers.
We have a few suppliers that have high absenteeism. They've been struggling to ship us parts. We've had to store some trucks here in the third quarter because of that. So supply chain issues and labor shortages are really highly tied now. It's not just chips anymore. It's changing complexity. So I think that's the biggest issue we're seeing in the economy right now.
SEANA SMITH: Jim, how long until you see some of these challenges begin to subside?
JIM FARLEY: I have stopped forecasting that. I mean, bottom line is we think it's going to happen-- continue into the foreseeable future. You know, I think we're very good at dealing with these now. We're gotten better and better and more efficient in helping our suppliers find labor, whatever it takes. It does feel like "Whac-A-Mole," but we're getting better at doing that.
And I guess I think we should kind of count on this happening for some time. I don't think the labor market's going to ease any time soon. It has a big impact on us. So we're kind of running our business now and have developed a bit of a rhythm around this challenges that we're seeing. I think it's going to extend way into next year. Does it end next year, or year after, or halfway through? I don't know. I don't think we should count on any of that.
SEANA SMITH: Jim, how do you see this affecting pricing of your vehicles down the road? I know you've already raised prices on some of your vehicles, especially what you're putting out here in the electric vehicle space. Do you see, potentially, the need to raise prices more here in the next year or two?
JIM FARLEY: It's a good question. Ford is now number two in the US in electric. So lithium and nickel prices, specifically, that are raw materials in our batteries have gone up a lot, especially lithium. We are starting to see nickel ease a little bit. Lithium is still at very elevated levels. And, you know, but the good thing is our electric vehicles are in such high demand that we're able to absorb that input cost.
On the internal combustion side, we're also number two in hybrid sales in the US, interestingly. And that pricing seems to be really leveling off now. We're starting to see inventories improve for our industry, and that means more competition, good for buyers, actually.
And we're starting to see the pricing at very high levels starting to ease. In fact, used cars are starting to moderate now. We're starting to see used car values deteriorate after more than a year of record prices. Still very high levels, and I think that's an important indication for us.
SEANA SMITH: Jim, you mentioned the fact that you're number two right now in EV production. Of course, you have very ambitious plans, Ford looking to hit 600,000 EV production--
JIM FARLEY: We do.
SEANA SMITH: --by the end of 2023. When do you think you're going to overtake Tesla?
JIM FARLEY: You know, we would like to. We have plans to get to 2 million in four years. A lot of it is here in Tennessee and Kentucky and Michigan and Ohio. We're really excited. It's going to come down to the demand for our vehicles.
The Inflation Act that just passed gives our commercial customers $7,500 tax credit for electric, going electric. So we're more than 90% share of the electric van market now with E-Transit. We see our demand for these commercial electric really high, like people are really starting to move electric in the commercial world. They're way behind retail.
I think that makes us different as a company than a company like Tesla. Well, I think we're going to have the capacity. We're working hard. I was in Asia last week securing cathode and anode materials and batteries. So these are all-- it's all coming together here for us at Ford.
In 2026, we want to do that 2 million. It'll come down to the product acceptance. First generation, we're sold out for multiple months, in some cases years. It's on us to make products that people love so when we get to that 2 million, we can not only have a great business, but it's profitable.
SEANA SMITH: So a couple of big takeaways there from that interview. Labor shortage, the biggest concern here for Ford going forward. Jim Farley saying that he doesn't see that improving any time soon. Pricing, he didn't say no when I asked him if they were going to continue to raise prices in the future. Obviously, a lot of that tied to the issues that they're having with their suppliers. And then their EV plans, despite higher inflation, despite the supply chain issues, they still remain on track to reach their ambitious goals next year, and also 2 million in production of EV vehicles by 2026.
JULIE HYMAN: Very interesting. Labor affecting so many different areas Thanks so much, Seana.
SEANA SMITH: Thank you.
JULIE HYMAN: Great interview.