Ford and GM’s leaders disagree on the future role of hybrid vehicles

Ford’s CEO, Jim Farley, argues hybrids should be viewed as a viable long-term solution, while GM’s CEO, Mary Barra, considers them a temporary step towards full electrification, according to Reuters.

Hybrid Vehicles: The Debate

Jim Farley wants the industry to stop seeing hybrids as a mere transitional technology.

At a recent Bernstein conference, he stated, “Many of our hybrids in the U.S. are now more profitable than their non-hybrid equivalent.”

Farley emphasized the profitability and relevance of hybrids, particularly extended-range hybrids, for the future.

In contrast, Mary Barra does not see hybrids as a long-term strategy. GM plans to continue producing plug-in hybrids starting in 2027 to meet regulatory demands but remains focused on fully electric vehicles.

“It’s not the end game because it’s not zero emission,” Barra said, highlighting GM’s commitment to zero-emission vehicles.

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Ford’s Strategy

Ford aims to quadruple its hybrid sales in the coming years, adjusting its investments in EVs accordingly. The company has delayed some EV production in Canada and the U.S. Farley also expressed that EVs should not be subsidized, pushing for profitability in the EV market without government support.

“We believe that we have to get to that fitness level as soon as possible,” he remarked.

In 2022, Ford separated its electric and software division from its gas-engine operations to boost efficiency. Despite these efforts, Ford projects a significant loss of $5 to $5.5 billion in its EV business this year, following a substantial loss of $4.7 billion in 2023.

The China Factor

Farley and Barra both acknowledge the competitive threat from Chinese automakers, particularly in software and subscription services.

Farley noted, “The China consumer experience digitally is far beyond the West,” stressing the need for cost and quality improvements to compete globally.

Barra echoed this sentiment, emphasizing the importance of maintaining strong brands and reducing costs to stay competitive.

“I take the Chinese competitors, especially the top ones, very seriously,” she said.

EVXL’s Take

This debate between Ford and GM’s CEOs highlights the differing strategies within the auto industry regarding hybrid and electric vehicles. As Ford pushes for a balanced approach, leveraging hybrids for profitability, GM is steadfast in its pursuit of a fully electric future. The influence of Chinese automakers adds another layer of complexity, pushing U.S. companies to innovate and cut costs to remain competitive.

Photo courtesy of Ford and GM