American legacy automaker Ford continues to lag behind Tesla in the electric vehicle space. Despite the two auto giants’ rivalry, CEO Jim Farley believes he and Elon Musk have a “mutual respect.”
Ford and Tesla CEOs maintain respectful rivalry
Ford CEO Jim Farley made interesting comments about his relationship with Tesla CEO Elon Musk in an exclusive interview with Yahoo Finance Executive Editor Brian Sozzi on Monday.
According to the Ford boss, he and Elon Musk maintain a respectful rivalry in the electric vehicle playing field. CEO Farley even shared that he recently texted the American billionaire about the North American Charging System (NACS) adapters, saying that Musk was very responsive.
Farley praises Musk’s production strategy, talks about NACS partnership progress
Yahoo Finance’s Sozzi Ford CEO Farley about the progress of their NACS and Supercharger partnership with Tesla. The Ford boss also shared positive remarks.
“It’s going well. So far, we really appreciate working with Tesla, between the number one and number two players in the country. We think giving our customers access to the Supercharger network is a good thing, but it’s early days. We still need 90,000 adapters.”
Ford CEO Jim Farley
Sozzi then asked if the Ford boss thought he would eventually get the crucial NACS adapters.
“I’m hoping. I texted Elon last night, we’ll see what he says.”
Ford CEO Jim Farley
CEO Farley said in response to a follow-up question that Musk was very responsive, probably because they had respect for each other.
“He is really an incredible person, like he absolutely does. He very much made this decision based on the adoption of EVs in the country, and of course, it’s good for him.”
Ford CEO Jim Farley
CEO Farley also praised Musk’s production strategy, even comparing him to Ford founder Henry Ford.
“I think when Elon started scaling Model Y and Model 3, he very much followed the Henry Ford model with the Model T, increasing his utilization of his plant and bringing the cost down for customers as he went mainstream with EVs. I think it’s been a largely positive relationship.”
Ford CEO Jim Farley
Ford on the future of EVs
Ford raised its financial expectations in April, as reported by AutoBlog. The company now anticipates operating profits reaching the upper limit of its previous forecast, ranging from $10 billion to $12 billion.
It also boosted its adjusted free cash flow guidance to $6.5 billion to $7.5 billion, up from the prior range of $6 billion to $7 billion.
“If Ford can continue executing in the coming quarters, the stock should benefit from positive EPS revisions and an increasingly compelling case for multiple expansion post last year’s re-segmentation — all anchored by a strong B/S & improved FCF conversion.”
Citi analyst Itay Michaeli wrote in a recent client note
While Ford’s Model e unit is set to hit $5 billion in operating losses in 2024, CEO Farley assured that he has a timeline for EV profitability without revealing it.
“We wouldn’t allocate capital if I didn’t think it was profitable.”
Ford CEO Jim Farley
The Ford boss’ good words for Elon Musk and Tesla are unsurprising, considering that the legacy automaker was the first to commit to NACS uptake. It prompted the rest of the major automakers to follow suit. As part of the agreement, Tesla has welcomed Ford EVs into its Supercharger network since late February.
You can watch the full interview of Ford CEO Jim Farley by Yahoo Finance’s Brian Sozzi below:
