Ford looks to lower costs, tap into subscription revenue stream
Carl Court/Getty Images News
After reiterating guidance targets and outlining a number of supply chain agreements early on Monday, Ford continued in highlighting plans to cut costs amid an EV push, increase production of ICE vehicles, and skirt geopolitical risk.
Monday began with a flurry of announcements from the Dearborn-based automaker. The disclosures included a deal with Sociedad QuÃ­mica y Minera de Chile (SQM) and Albemarle (ALB) for lithium supply, a deal with Compass Minerals (CMP) to supply battery-grade lithium carbonate from its lithium brine development project in Utah, and an agreement with Livent (LTHM)-backed Nemaska Lithium to supply lithium hydroxide.
Among key updates on EV production during the day, CEO Jim Farley unveiled an upcoming 3-row, 7 seat SUV with a 350-mile range. The new vehicle was likened to a âpersonal bullet trainâ by Farley and was noted as bucking the trend of smaller EV offerings from many competitors. The new model is slated for release in 2025.
Vice President of EV Industrialization for Ford Model e Lisa Drake continued the EV updates, explaining the companyâs plan to achieve a 30% reduction in labor and overhead costs at its Tennessee factory due to reduced complexity of EV builds and, perhaps, job cuts. Though Farley clarified that jobs may rather be reorganized and reallocated rather than merely eliminated.
Drake also put a focus on the companyâs latest supplier agreements as keys to reducing costs moving forward. She added that the automaker will not be reliant upon China for its EV batteries, an issue that has come under significant scrutiny after the manufacturerâs recent agreement with CATL.
However, despite that focus on EVs to start the day, the ICE-focused Ford Blue program was highlighted as the Capital Markets presentation progressed. Ford Blue CEO Kumar Galhotra told the audience gathered at the event that âdemand continues to outstrip capacityâ for gas-powered vehicles. Galhotra said the company aims to increase capacity âby over 160,000 unitsâ in the next 10 months to capitalize on the unmet demand. 
Still, the company indicated that it expects overall healthier dealer inventories over the course of the year will drive down auto prices.
Finally, chief advanced product development and technology officer Doug Field offered a sweeping presentation. In his remarks, Field highlighted aims to improve efficiency, calling it âGodâs workâ and stressing the hotly-contested race to create smaller, more efficient batteries among automakers globally. He also promoted an increase in transaction efficiency, outlining the automakerâs push toward increasing digital auto purchases. 
Finally, Field said the company is eyeing increased revenue from subscriptions, akin to Teslaâs lucrative stream via its FSD offerings. For Ford, its Blue Cruise technology is slated to garner $200M in revenue over time, according to Field.
Despite the upbeat tone at the investor event, the market appears to be awaiting more evidence of Fordâs ability to deliver on its ambitious aims. Shares of Ford (NYSE:F) fell 0.4% shortly before Mondayâs market close.
More on Ford:
Ford: All Eyes On Ford+
Ford And Tesla, Not Ford Or Tesla
Ford continues to rethink strategy in China with job cuts, leaner operations
Ford Q1 results applauded by analysts, outlook draws debate
Ford Capital Markets Day With David Alton Clark - Bullishness Intact
Ford tries a new road with tests of hydrogen fuel cells in electric E-Transits