CNBC interview with Hinrichs

[Gurgeh]

On electrics:

CNBC: A year ago, Ford announced plans to increase its investment in electric and hybrid vehicles to $11.1 billion and a company statement says a “fresh look” at the potential market says it’s likely to be bigger than initially expected.

Hinrichs: We were always confident there would be growth in demand for electric vehicles. As we take a closer look, we’re seeing more acceptance. That’s especially true among millennials [who], over the next five to 10 years, will be the biggest buying group in the market. The multibillion-dollar question is getting your timing right. We’re still trying to find that. We believe electrification is a really important part of our future.

CNBC: On the same day Tesla revealed its Model Y electric SUV, Ford teased its own “Mustang-inspired” battery-electric crossover on Twitter. It’s supposed to be your first long-range model, but when is it coming to market?

Hinrichs: We haven’t given a timeline, but it’s next year, 2020, and we’re very excited about it. One of the things that often gets lost in the conversation about electric vehicles, because of the cost, is that there are attributes of a vehicle you can make better with electrification. Along with instant torque, there’s the smoothness and quietness of the ride, the low center of gravity. There are fewer moving parts, so reliability [should be better]. And the way you can use the package gets more efficient because you don’t have all that stuff in the engine compartment up front.

 

On shift to trucks/SUVs:

CNBC: Speaking of a changing market, the industry is in the midst of a dramatic shift from cars to trucks which now account for 70% of the U.S. market. Is there much room for more growth?

Hinrichs: I would say that it’s gone further than I estimated it would and it is still going. There are a few key contributors. The [light trucks] we offer today don’t have the compromises they did in the 1990s. Now, you don’t have to give up the ride comfort and the relative difference in fuel economy has diminished significantly.

 

On "uncertainty":

CNBC: But how concerned are you about the U.S. economy?

Hinrichs: This “peak auto” story has been around for several years. It wouldn’t surprise me, given where we are in the U.S. economic and automotive cycle that people are being cautious about hiring. January and February sales were down but they were impacted by severe weather. We’ll see what the spring selling season brings. It usually tells a better tale of what the year will hold. But there’s clearly a lot of uncertainty out there.

CNBC: “Uncertainty” is a word I’ve heard a lot from you and other industry officials lately. Are we in a more uncertain period than the industry has faced in a long time?

Hinrichs: It’s fair to say that we’re in the most uncertain period since the global financial crisis. We have a U.S. government engaging in trade negotiations with multiple [nations] at the same time, which is unprecedented. And there’s a very important review of [U.S.] fuel economy standards. Given our cycle times and the capital exposures we have, we crave certainty for planning, as much as possible. So, when you add everything going on, the industry is going to get more conservative because we don’t know where to place all our bets.

 

 

https://www.cnbc.com/2019/04/10/heres-what-keeps-fords-new-no-2-executive-joe-hinrichs-up-at-night.html