Ford Motor CEO Jim Farley Talks Rare Earth Supply
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Bloomberg's Matt Miller is standing by with a special guest. Good morning, Matt. Good morning, Jonathan. Yeah, I'm here with the CEO of Ford, Jim Farley. And Jim, a lot to talk about here at Le Mans 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 counterattack. 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 6% really across the board. Has the low oil price been helpful to you or has it not helped to encourage people to buy electric cars?

Yeah, it's interesting because it cuts both ways at Ford. We're 60% almost of the commercial business in the U.S. and a lot of that is energy. So you go to Odessa, Texas, everyone drives a Ford Super Duty. So, you know, if oil isn't in that $65, $70 range, our customers 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-size SUV demand go down when there are big spikes happen in '08, 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, in some sense, higher gas prices. It is. I drove your Lightning. It was fantastic. Spent a week in it. I've driven the Mach-E for a couple 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 U.S.

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 U.S., you know, an 8%, 7% 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, we had to kind of sell like 15 to 20% of our mix to be EVs, both for the ZEV states, California, Colorado, New York, but also to meet the national tailpipe emissions. And so what's happened, interestingly, the total number of EVs in the U.S. 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 growing 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 $80,000 SUV electric vehicle. We've invested a lot in hybrid.

We are really successful with our truck hybrids. The best-selling vehicle in the U.S. for 47 years has been the F-150. 25% of those customers now buy hybrid, and a lot of it is exportable power. You can run your house for six days with an F-150 hybrid now, and the others don't offer that at all. So, yeah, we think hybrid is really the mainstream technology. We'll see E-Revs come to the U.S. soon as the next technology for partial electrifying. I want to ask you about...

race on Sunday, sell on Monday. Since we're here at Le Mans, 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 20% of a global profit coming from our enthusiast off-road products. And we race at Dakar, we race at Baja, we race at 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 '66 at Le Mans did for Ford Motor Company. It made us a global company. We're an American company, but that moment changed us completely. And that's why we're going back in '27 to take on Ferrari and take on Porsche. We think we have the technology, but also the tech transfer, software, battery tech, aerodynamics.

It's different than the 70s, 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 touted yourself as literally the most American carmaker. 80% 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 Ford, this is a moment for us. You know, we have employee pricing out there. We gain a couple points of share year over year. A lot of Americans are shopping Ford.

Because now they're starting to think, hey, half the cars in the U.S. are imported. And if all the car companies were like Ford, there'd be 15 new factories in the U.S., a million new jobs. You know, I think a lot of Americans are starting to pay attention to 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 subsidies direct or indirect for their automobile industry. You know, this is a great thing. We have to sort out this Mexico-Canada thing because we need to keep the vehicles affordable in the U.S.,

And there's actually a lot of parts we can't even make in the U.S., Matt, as you know. And so we have to kind of sort out what role does Mexico and Canada have in our North America market from a supply chain and manufacturing to keep the vehicles affordable. And that's something that we're talking to 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's 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 day to day.

It's day to day. These high power 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 auto system. They go in your motors for your wipers and your seats. They're all all over our F-150, for example.

We have applications in Amofcom. They're getting approved one at a time. We're educating the administration. We're educating the Chinese leadership about how important these jobs in the Midwest are that are 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 on our jobs in Michigan and Ohio.

So we'll see. It's hand-to-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. Every business starts with an idea. How can you go from daydreamer to industry leader? Amazon Business accelerates your journey.

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