Products You May Like
DETROIT – Ford Motor CEO Jim Farley expects the auto industry’s ongoing transition to electric vehicles to force major consolidation of automakers and suppliers in the years ahead.
Farley said the massive amounts of capital needed to invest in the technologies will force smaller companies to be acquired and put pressure on a litany of new electric vehicle start-ups that are already running into trouble as funding dries up.
Legacy automakers and suppliers, he said, “absolutely will get consolidated.”
“There will be some big winners, some people who transition, some who won’t. Many of the small players cannot afford to make this transition,” Farley said Wednesday during the Bernstein 38th annual Strategic Decisions Conference.
Farley said the addressable market that EV start-ups are going after isn’t “big enough to justify the capital that they’re spending or the valuations.” However, he’s betting on Chinese EV players over current U.S. players.
“There’s a shakeout coming, and I feel like that shakeout is going to favor many of the Chinese new players,” he said, without naming any EV start-ups. High-profile EV players in China include Nio, XPeng and Li Auto.
Farley did mention one Chinese EV by name: the top-selling Wuling Hongguang Mini EV produced through a joint venture between China automaker SAIC and General Motors.