The remarks from the two Chief Financial Officers (CFOs) signify a departure from earlier in the year when numerous economists and some executives in the automotive industry were preparing for an economic downturn in the United States.
In January, Tesla CEO Elon Musk predicted a “severe recession” and subsequently began reducing prices on the company’s electric vehicles.
Since then, car sales in the US have stabilized, and vehicle production has rebounded to nearly pre-pandemic levels as supply chain disruptions have eased.
Jacobson and Lawler reaffirmed their commitment to cost-cutting initiatives, which have already resulted in thousands of job cuts in their respective companies, Ford and GM. These two automakers face pressure to finance the introduction of new electric vehicles (EVs) that, in the short term, will generate lower profits compared to traditional combustion-engine trucks and SUVs.
Lawler stated that Ford anticipates sustained strength and growth in its combustion-engine vehicles over the next few years as it increases investments and production in EVs. Meanwhile, the company remains focused on reducing engineering and manufacturing costs by 50% for its second-generation EVs, including the successor to the F-150 Lightning set to launch in the mid-2020s.
Lawler hinted that Ford might adopt Tesla’s strategy of utilizing large underbody castings in its next-generation EVs as part of its broader cost-saving efforts.
Jacobson stated that GM will continue its efforts to cut $2 billion from its annual operating costs. As GM faces increasing costs associated with EVs, Jacobson emphasized the importance of ongoing cost reduction rather than treating it as a one-time initiative.
Both executives highlighted the benefits and cost-saving opportunities of joining Tesla’s EV charging network and adopting its North American Charging Standard (NACS) charging protocol. They believe that these decisions will save money and benefit their EV customers.
Jacobson mentioned that GM might collaborate with Tesla to develop future locations for EV chargers.
Lawler assured that Ford’s adoption of Tesla’s charging standard will not require additional capital investment.
Starting in early 2024, owners of GM and Ford EVs will gain access to over 12,000 Tesla Superchargers in North America.
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Omprakash Tiwary is a business writer who delves into the intricacies of the corporate world. With a focus on finance and economic landscape. He offers readers valuable insights into market trends, entrepreneurship, and economic developments.
