Ford CEO states that electric vehicles (EVs) require 40% less labor and warns of hard times ahead as the company focuses on EV production.
- Ford Motor has set a goal of 50% of total sales being EVs by 2030, and CEO Jim Farley warns of “storm clouds” ahead as the company transitions.
- Farley says that EV production requires 40% less labor compared to gas-powered cars and that the company will have to begin making changes.
- He states that he doesn’t plan to cut employees yet, but to begin producing more parts internally so every employee has a role in the future growth.
Why it’s news
EVs have been steadily growing as both people and companies are attempting to go green and limit their carbon footprint.
The latest EY Mobility Consumer Index shows that 52% of people looking to buy a car want to buy an EV. This is the first time the number has exceeded 50%, representing a rise of 11 percentage points since last year.
In an effort to become more environmentally friendly and supply enough EVs to keep up with demand Ford made the decision to focus on EVs. The company set a goal of having 50% of total sales be EVs by 2030.
Recently, Farley stated that EV production requires 40% less labor compared to gas powered cars and the company will have to start making changes in order to meet its goals.
He said that there will be “storm clouds” ahead as the company switches roles around in order to fully transition into EV production.
“It takes 40 per cent less labor to make an electric car, so . . . we have to insource, so that everyone has a role in this growth,” Farley says.
Backing up a Bit
Ford previously announced that it was cutting 3,000 employees in order to focus on EV production.
Farley has previously said that he believed the company was employing too many people and not all of them were skilled in EV production.
“We are eliminating work, as well as reorganizing and simplifying functions throughout the business. You will hear more specifics from the leaders of your area of the business later this week,” Farley and Ford Chair Bill Ford wrote in an email.