JIM FARLEY: Well, I've been leading a company for three years, and 2024 is the first year I can say, we really have a chance to have a breakout year, for a lot of reasons. We're past our labor issues and negotiation in the US.

But most importantly, we're launching like six new products. And we already have a fresh new lineup of Broncos and Mavericks and, but now we just launched Super Duty, and we have the new Mustang and we have a new Explorer and Expedition and a new F-Series, America's bestselling vehicle for 47 years.

We have this lineup we've never had before. And the consumer is strong. Interest rates are moderating. So payments aren't going to have the same escalation we saw last year. And our demand and all the chip issues and supply issues, working through, and now we have real traction on quality. So this is-- so this is without getting into specifics as you said, we have a chance at Ford to really, really have a very special year.

PRAS SUBRAMANIAN: And a lot of new cars coming up. Some EVs, as well. We've seen in this country, EVs, the big transformation happening. A few hiccups here. Maybe it's because of pricing or just demand or range anxiety, things like that, but from your point of view, what's going on in the EV landscape? First big picture, then also with Ford, as well.

JIM FARLEY: Well, the big picture is that China makes 50% to 60% of all the electric cars on the planet. And so big picture, we have a whole new competitive set we never had. And now China in the first quarter last year became the number one exporter of vehicles globally.

Bigger than South Korea, bigger than Japan. We've never seen a competitive set of EVs exported now. Now one out of four vehicles sold in Mexico, which I can drive to from Detroit in a day, is built in China. So China exports. And EVs, big topic.

The price compression after Tesla dropped its prices with the new competition from Ford, we're number two in the US now. A long way from Tesla, but we're really growing. Our fourth quarter and Lightning sales were up a lot. So we're starting to scale. We just broke 100,000, and we're close to 150,000 units now, about $10,000 a month of sales in the US. So our EVs are growing.

But the prices have come down. And what that really is telling us, is that its mainstream customers now. They're not willing to pay the same premiums the early adopters. And we're also seeing we're number two in hybrid. So at Ford, we have all this choice. An F-150 electric or hybrid, or an ICE, we don't really care. Let the customer choose.

We're starting to see hybrids and electrics take off at the same time, but the prices become more similar. And so I think what you're seeing is a natural rational-- rationalizing of this new technology by the customers. We're seeing mainstream customers who are interested in EVs, but they're not convinced. And they're not going to pay a big premium.

So what it means for the OEM, is cost. We have to dramatically reduce the cost. Thankfully, we thought this was going to happen. We weren't sure. And so we're just a few years away from launching our Gen2 products, which no one has seen.

And those are really oriented around a different cost level. And we can talk about that if you want. But to me, the whole thing about EV is the same as any technology transition we've had in the US-- in our industry. It's cost. We have to be competitive on cost and quality.

PRAS SUBRAMANIAN: Cost, and then also how you make these cars and how they're designed. I know you all talk about software-defined vehicles--

JIM FARLEY: Yes.

PRAS SUBRAMANIAN: --how important that is for you and the new leadership there in the company.

JIM FARLEY: Yes.

PRAS SUBRAMANIAN: And I got to drive with you in the-- this-- a demonstrator, they call it. This thing was, I'm surprised I didn't throw up in this thing. The Ford SuperVan, I mean, what? 2,000 horsepower or something crazy like that.

JIM FARLEY: Yeah, it's very modest.

PRAS SUBRAMANIAN: We drove around the track here in Charlotte. But is that sort of showing us the vision of what EVs can do and what the future is?

JIM FARLEY: Yeah. I think a lot of the hybrid and EV technology came at the market in very rational cars. And they were very commoditized, like a Prius or Model 3. And for us at Ford, we are not a commodity company. We make Broncos and Mustangs and pickup trucks, and people are really emotional about our product when we do it, right.

And so we wanted to create SuperVan to show people, even in a commodity commercial vehicle, that electric can be different and cool. And it's not just electric, it's a digital product, just like your phone. We can ship software to it, we can change the performance.

And the sports car of the future, like a Mustang, may be partially electric, fully electric, or ICE, but in either case, It's going to be connected, and we can control the performance with software. Change the torque vectoring with the motors in each of the wheels, in this case. Or change the damping or the braking characteristics with your phone. That's the future of our industry.

PRAS SUBRAMANIAN: Yeah, that, I don't know if that 2,000 horsepower electric van is the future of our industry, but one thing I did see was a thing called the switch gear, which is an F-150 Lightning EV that's basically a Raptor off road. I got to ride in this thing with Vaughn Gittin Jr., who is this like a drifter guy. And he took this thing and he drifted it around this course. And I was sitting in that truck and it was really cool.

- Wow.

PRAS SUBRAMANIAN: So that's showing us where EVs could possibly go. Immense power, extreme torque, that sort of thing. Applications that we don't think of we think of EVs, as like Prius is driving around. But actually, you can do some cool stuff, and I think that's what they want to highlight with these demonstrators, they call them.

JOSH LIPTON: It's a great-- first of all, why do you get all the best assignments? Why is that? That's not fair.

- Right? So cool.

JOSH LIPTON: It was interesting, because there is this big issue that we talk so much about, Pras, just this question of whether we overstated what EV demand really is in North America. And you heard the argument.

Some people would say, listen, you can have the government encourage and motivate and give the subsidies, but at the end of the day, Americans, they prefer a pickup. But I guess his point was, he really thinks first and foremost, it's price. That's the issue.

PRAS SUBRAMANIAN: Yeah. He's sort of taking that side of it where, if I build a car that you can afford, you're going to buy it no matter what kind of powertrain it is. Now, I'm not sure if he-- he might he might be right, he might not be right. We were seeing these issues with people driving these EVs in Chicago and colder places, they were having problems.

JOSH LIPTON: Yeah, that was a brutal article.

PRAS SUBRAMANIAN: Yeah, they may not want an EV, no matter how cheap it is. But I think he is hitting something on the head there. As Tesla brought those prices down, they sold 660,000 EVs in this country. Maybe there is untapped demand if the price is right. So we'll see if he's right.

And I think that's where they want to go. Also, with these software-defined vehicles, make them cheaper, they can-- you use your phone and do whatever you want, I think that's sort of what he thinks is the future for EVs.

- Was there anything surprising real quickly, about his personality? He spent so much time with you. Like, that was a very generous CEO.

PRAS SUBRAMANIAN: Yeah, yeah. I mean, I've seen him at Pebble Beach last year and things like that. He's the kind of guy that's really passionate about cars. So I think he sort of, if he sees you have that passion, he wants to talk to you more about it. And I think he's a true car guy.

And I think this is one of the differences we've seen with Mary Barra being an engineer actually. Farley a car guy. You see people who actually care about the industry being installed there. They seem to be doing well, as opposed to maybe some finance guys who may have been put in place to count, you know, pennies, and dollars, and staples.