Bloomberg Audio Studios, podcasts, radio news, Bloomboxman Miller is standing by with a special guest. Good morning, Matt, Good morning Jonathan. I'm here with the CEO Ford, Jim Farley and Jim. A lot to talk about here at Lamar with you. You just got out of a race car. But before we do that, I want to ask you about the Israeli strike on Iran and the counter attack. Are all of the Ford employees that you know of in safe places?
You do have operations in the Middle East? We do. It's a really important region for us. We're watching Turkey as well. We have a huge operation in Turkey. We export all the way through Europe and the UK. So so far, so good, but it's clearly a concern for all of us in business.
One of the things we've seen as a result, obviously, is the oil price rise five or six percent really across the board. Has the low oil price been helpful to you or has it not helped to encourage people to buy electric car?
Yeah, it's interesting because it cuts both ways. At forward, we're sixty percent almost of the commercial business in the US, and a lot of that is energy. So you go to Odessa, Texas. Everyone drives the forward zuper duty. So you know, if oil isn't in that sixty five seventy dollars range, our customer suffer. But you know, obviously, I think for the economy and for everything, it needs to be in that kind of range. That makes sense for everything.
Large spikes, big changes in oil prices and gas prices have huge impacts on our demand. We see truck and full sized SGUV demand go down when they're big spikes. Happened in eight it happened many times. So no, I don't think our business likes big changes. For the consumer, it's very stressful for them.
The electric business, though, I would imagine, also is dependent on kind in some sense higher gas prices.
I drove your Lightning. It was fantastic, spent a week in it.
I've driven the Machi for a couple of weeks, and one of the great pleasures is you don't ever have to go to a gas station. Right How are those businesses doing right now because you've taken such big losses there and maybe slowed down in terms of your progress into evs.
Yeah, we've really changed because we're thankful we've been number two to Tesla for three years in the US because we spent our capital like five six years ago and all that product's been out for four years that you mentioned. So we've learned a ton now. We've changed our capital allocation for evs. We've reduced the spending, changed the battery chemistry a lot to focus on more profitability. We've gone
down market and mostly in commercial. Those are the only markets where we think in the US, you know, an age seven percent of the industry is going to make sense for EV where you can actually make money. And the EPA requirements have a big impact on the EV investments by OEMs. During the last several years, you know, we had to kind of sell like fifteen to twenty percent of our mix to be EV's both for the ZEB States California, Colorado, New York, but also you know,
to meet the national tailpipe emissions. And so what's happened. Interestingly, the total number of evs in the US has grown, but the total revenue has not changed in three years because the prices have come down equal to the volume going up. So the EV market has not been going for three years. If you look at total revenue. Everyone looks at unit volume, don't look at that, look at the price and the volume, and I think we now
have a good strategy going forward. A lot of our competitors are just investing for the first time, and good luck if you're selling an eighty thousand dollars SUV electric vehicle. We've invested a lot in hybrid. We are really successful with our truck. Hybrid's twenty five the best selling vehicle in the US for forty seven years, been in the F one fifty. Twenty five percent of those customers now by hybrid, and a lot of it is exportable power.
You can run your house for six days with an F one fifty hybrid now and the others don't offer that at all. So yeah, we think hybrid is really the mainstream technology. We'll see erevs come to the US soon as the next technology for partial ELECTRICI I want to ask you about.
Race on Sunday, sell on Monday, since we're here at LAMA, since you just got out of a Mustang race car, how does this racing effort, and it's a big effort trickle down to the bottom line for Ford shareholders.
Well, for us, the biggest is off road market. You know, we have you know almost twenty percent of a global profit coming from our enthusiasts off road products, and we race it to car. We said Baja, we have said King and the Hammers. That's a big thing, you know. I don't think there's a better way to promote your brand. Look what Ford winning in sixty six at Lama did for Ford Motor Company. It made us a global company.
We're American company, but that moment changed us completely, and that's why we're going back in twenty seven to take on Ferrari and take on Porsche. We think we have the technology, but also the tech transfer, software, battery, tech, error dynamics. It's different than the seventies, but the tech transfer over to our road cars is immediate. You'll see hundreds of Ford engineers here who will be working on
Monday on our road cars. And it's really important tech transfer, but we do it, I think as smart as we can. And maybe as a racer I'm more sensitive about wasting money on racing, and we challenge ourselves to be really smart. I think we've done a great job with the off road, the raptors, the tremors, you know, all the broncos. I think that's been frankly some of the smartest investment we had in racing.
You say you're an American company, You've outed yourself as literally the most American car maker. Eighty percent of the cars that you sell in America are made there.
Donald Trump was out overnight saying maybe he's.
Going to go after even higher auto tariffs. While you've said in the past that causes costs and chaos, does it also kind of help you because no one else makes as many cars as you do in America.
Well, for Forward, this is a moment for us. You know, we have employee pricing out there. We gained a couple points a share year over year. A lot of Americans are shopping Forward because now they're starting to think, hey, half the cars in the US are imports, and if all the car companies were like Ford, there'd be fifteen new factories in the US, a million new jobs. You know. I think a lot of Americans are starting to pay
attention to where these where these cars come from. And for us, yes, I think Donald Trump's policies, especially around the Asian countries where you know they've supported with substies direct or indirect for their automobile industry. You know, this
is a great thing. We have to sort out as Mexico Canada thing because we need to keep the vehicles affordable in the US and there's actually a lot of parts we can't even make in the US, Matt as you know, and so we have to kind of sort out what it ruled does Mexico and Canada have in our North America market from supply chain and manufacturing keep the vehicles affordable. And that's something that we're talking the administration. We found the administration to be very positive to work with.
They want to help companies like Ford that did the right thing for Americans. But we have more work to do in.
Terms of what the administration has been trying to do with China. Are you satisfied with the rare earth minerals that you have access to? I know that you had to slow down production in the past. Yes, Have you been able to secure the amount of magnets.
That you need? It's stay to day. It's stay to day. These high payern magnets, the raw materials for them only come from certain places in the world. They're all processed in China and they go in your speakers and your autosystem. They go in your motors, for your wipers and your seats. They're all over our F one fifty for example. We have applications in them offcom. They're getting approved one at
a time. You know, we're educating the administration, we're educating the Chinese leadership about how important these jobs in the Midwest are. There dependent. We have had to shut down factories. It's hand to mouth right now, and I'm reading the paper like everyone else. I was very happy to read about London and having a good meeting there because it has a direct impact and our jobs in Michigan, Ohio. So we'll see. It's hand and mouth right now.
Jim, thanks so much, really appreciate your time and congratulations on the race.
Thank you this morning. Look forward to you and the challenge tomorrow.