Ford's CEO reveals his plan for the company's biggest transformation in history
The auto giant has big plans to transform itself from a company that just sells cars to a company that touches all aspects of mobility.
Under the leadership of CEO Mark Fields, Ford has made a number of big bets in autonomous tech, electric cars, and in transportation services to move the company into this new era.
We recently had the chance to speak with Fields about the company's push into electric cars and how it plans to grow its transportation services. The interview has been edited for length and clarity.
Electrified cars will dominate the market in just 15 years
Fields is serious about growing the company's electrified products and he's making big investments to prove it.
In 2015, Ford announced it was spending some $4.5 billion by 2020 to offer 13 new EV nameplates. Last week, the company revealed seven of those vehicles it plans to launch, including an F-150 hybrid, a Mustang hybrid, and a fully electric SUV with a range of 300 miles per charge.
"Our view is that the industry offerings, 15 years from now, is that there is going to be more electrified offerings than there are internal combustion engines. So we want to build a reputation around that, we want to build our brand resonance around that," Fields said. "We want to be a leader in this area."
However, just because Ford is making big investments in electrifying its lineup doesn't mean it's completely abandoning gas powered vehicles.
"Fifteen years out, there's still going to be a lot of vehicles on the road that are internal combustion engines, and we are going to be there. We are going to be there for the best ones, giving customers what they want, but at the same time we also want to be there for electrification," Fields said.
Ford's self-driving cars will be for everyone
Ford, along with just about every other major automaker, is making a push in autonomous tech.
But unlike some of its competitors, Ford's first self-driving car for commercial use will be ready by 2021 and will have level four autonomy, meaning it will be capable of operating without human intervention in a predefined area. For this reason, it won't have a brake pedal, an accelerator, or a steering wheel. The vehicle will also be a hybrid and will roll out in some form of a ride-sharing or hailing service, Fields said.
Ford is launching the vehicle as part of a ride-sharing fleet instead of selling the car outright to consumers because the company wants to bring the technology to the masses, while also creating new business opportunities, especially in urban areas.
"Our approach on autonomous vehicles is, we've had a history going back to our founder Henry Ford of democratizing technology. Not just making it for people who can afford luxury vehicles. And our approach is how do we take this technology and democratize it so that it becomes available for many, many people," Fields said.
Ford has not yet revealed where its driverless cars for commercial use will roll out first, nor has the company said whether or not it will launch its own network for such a service. However, Fields said that the company is open to partnering and that a ride-sharing or taxi-hailing service would make the most sense in urban areas.
"If you think about the markets, obviously in dense urban areas, autonomous vehicles will be prevalent, but maybe in suburban or rural areas, it won't be. And guess what, that is where we have a lot of trucks, our vans, things of that nature, it's a really important business and we want to continue to grow it and make sure it's vibrant," Fields said.
Ford's business model is completely transforming
The rise of electric and autonomous cars has spurred Ford to completely rethink the way it does business.
"Our business model over many years has been about how many of the vehicles did we sell. Now, we are looking at the ecosystem around that and essentially it's looking at services and revenue, it's about looking beyond just the sale of the vehicle," Fields said.
For example, when it comes to its electrification strategy, the company is thinking about more than just selling the vehicle, but also about how people will power the vehicle, Fields said. So last year, the company partnered with BMW, Daimler, and Volkswagen to build out a network of about 400 fast charging sites across Europe.
"First off, we want to see how we make it easier for customers to have an electrified vehicle, but also at the same time, what are the new revenue opportunities for us? And we will continue to look for those new types of things."
But it's not just mobility services like ride-hailing or charging stations that Ford is looking at. Autonomous cars open up new opportunities to sell an experience, as well, Fields said.
"For a lot of years our business model was all around being fun to drive, but now we've added a new element, being fun to ride. And that means different things to different people. So as we are kind of reimagining the experience in the vehicle," Fields said.
He said that this could mean there will someday be tailored experiences inside its cars, like a car customized for someone who wants to do business during their commute, or a vehicle that centers around an entertainment experience.
"We are really thinking through first from a customer instinct," Fields said. "What services can we provide them that makes their lives better, but also provide revenue growth opportunity for us."
Ford will always sell cars
Despite the company's push into driverless cars and new mobility services, Ford has no plans to abandon selling cars, Fields said.
"I think we will always be in the business of always selling cars and trucks, but at the same time we really want to grow the services side of our business," Fields said. "We are going to continue developing cars and trucks, not only to provide vehicles for those services, but you know there's going to be people that will want to buy, drive and own their vehicles the way they have for many years."
While the company will continue to build and sell cars, it is also looking holistically at mobility, Fields said.
In March, the company established Ford Smart Mobility LLC, a subsidiary focused on creating, growing and investing in new transportation services. Since the launch, Smart Mobility has already made a number of investments in new ventures, including the purchase of Chariot, a San-Francisco based shuttle service. The company also partnered with Motivate, a bike sharing company, to launch a bike sharing program in San Francisco this year.
The company could someday even consider a subscription service where a person subscribes to Ford cars and has access on demand, Fields said.
"We are going to experiment with a lot of different things because again there will be a lot of different people who will just want access versus ownership, and as a company I think it's really important that we understand that and figure out a way to experiment and figure out a way to provide those kinds of services," he said.
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