Ford CEO Expects Industry Consolidation amid EV Transition
June 2, 2022—Ford CEO Jim Farley says he expects the ongoing, rapid shift toward electrification in the industry to force consolidation among automakers and suppliers.
Citing the "massive amounts of capital" needed for new technologies, Farley during the 38th-annual Bernstein Strategic Decisions Conference said smaller companies and EV startups will be forced to be acquired or face losing funding fast. According to a report from CNBC, the chief executive legacy automakers aren't immune, either, going on to say some will "absolutely get consolidated."
“There will be some big winners, some people who transition, some who won’t. Many of the small players cannot afford to make this transition,” Farley said, adding that the market EV startups are chasing won't be "big enough to justify the capital that they're spending or the valuations."
Farley says the key to winning the transition is cutting costs, citing Tesla's direct-to-consumer sales model.