Ford CEO: EV unit split had to happen to move faster

Ford CEO: EV unit split had to happen to move faster

At this year’s Monterey Car Week, Lincoln (F) is celebrating a major milestone — in style.

The brand, now 100 years old, will be a prominent brand at the Pebble Beach Concours d’Elegance on Sunday and will show off its electric concept vehicle Model L100. The concept of an electric vehicle (EV) is a massive vehicle with a fully configurable, luxurious interior that re-imagines what it will be like to be transported in an autonomous future.

Ford CEO Jim Farley believes this is Lincoln’s future.

“The biggest change in our industry isn’t really electrification, it’s more about autonomy that comes with a software-updatable vehicle,” Farley told Yahoo Finance from the Model L100 Concept at the Quail Event in Carmel, California. “Moving to a digital powertrain is great, but the real change in our industry is that you’re going to use your interior differently than you think…at least on the high side.”

For the interior, at least, it’s something Farley calls a “digitally enabled experience” that can be changed to infinity through software updates.

Lincoln’s transformation, with the brand going all-electric and introducing 4 new EV models by 2026, reflects the changes taking place at Ford, where Farley has split the company into two operating units to drive the EV transformation.

Lincoln Model L100 Concept interior

Lincoln Model L100 Concept interior

For Farley, the split had to happen to get things done faster.

“I have no idea why other people wouldn’t do it,” Farley says of splitting the ICE (internal combustion engine) business from the EV business.

“I literally saw the company struggle; I saw a transmission engineer trying to learn about batteries, [the transformation] would just take too much time, we don’t have time, we’re way behind,” Farley says of the need to change the way Ford did business. “So in order to catch up and succeed, we have to specialize…I have no idea how we would make this transition if we didn’t specialize.”

Farley says Ford currently outsources a lot of things, from electronic equipment to software — things the company used to outsource. That has led to hiring new employees from other industries to help that change, one that the company can do more easily with two separate business units.

Farley believes the new incentives for EVs and components coming from the just-signed Inflation Reduction Act are a “big deal.”

“It will certainly help our industry, I would say our economists would be very favorable to what just happened, but the biggest benefit isn’t the EV consumer credit, it’s the $35 per kilowatt hour (kWh) support for battery production in this country,” Farley says.

The Importance of Monterey Car Week

Legendary race car driver and restorer Phil Hill

Legendary race car driver and restorer Phil Hill

As a young man, Farley worked with legendary race car driver and automotive restoration expert Phil Hill and Monterey. He also worked on many of the cars that ended up in the Pebble Beach competition race.

“[Monterey Car Week] takes me back to, for me, my original love of our industry, and frankly how I paid for high school, and the people I learned the most about cars, where those mechanics were making eight bucks an hour,” Farley said . “I learned more about beauty and engineering excellence from them than from any of our chic engineers.”

Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and further Instagram.

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