Closing Advice for EV Shoppers

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You have a night for yourself but don't like the sound of the silence so you turn on the TV just for the ambiance. It's a little trick. help Its you feel like you've got company and aren't alone. And other insurers, well, they may make you feel alone. But when you switch to GICO, you've got claims reps available around the clock . So whenever you need, you'll have people around to help. And let's turn on the washing machine . Just for good measure . Isn't that soothing? It feels good to have support. It feels good to Geico . Hey everybody, it's Neili. You remember last year I took a break from Decoder after we had a baby. In my place, we had an excellent slate of guest house and we've been working hard to bring you those episodes in full video since we launched our official Decoder YouTube channel. So today we're featuring a really great interview with Ford C EO Jim Farley, conducted by my very good friend Joanna Stern. Joanna was still working for the Wall Street Journal as a columnist when she did this interview, but she's since left the journal and launched her own new media company, New Things. We actually had her on as guest talking about her new company earlier this year . We'll link that episode in the show notes. Join us and Jim talk back in September of last year, right after Ford announced a major new manufacturing process for its electric car lineup. Since then, a lot has happened. The company took a massive nineteen point five billion dollars write down on its EV operation, discontinued the all electric F one hundred fifty lightning, and lost EV and Software Chief Doug Field. The Verge has done a lot of stellar reporting on what's going on inside Ford as it tries to pull off its transformation, I'll drop those links in the show notes as well. But back in September, as you'll hear in this interview, Farley very much saw the future of VV's at Ford as a gamble that would require some big risks, and we're obviously now seeing just how big those risks actually were. Joanna also pulled some exclusive news out of Jim at the time, including some really telling quotes about Trump's terrorist policy, competing with Chinese EV's, and the company's stance on Apple CarPlay. You knew there was going to be some Apple CarPlay in this one, didn't you? Okay, Johnan Stern of New Things Interviewing Ford CEO Chimfarley. Here we go. Jim Farley, you are the CEO of Ford Motor Company. Welcome back to Decoder. It's great to be here with you, Joanna. So thank you for coming on my show. Obviously , this is not my show. This is Neoli's show, but I want to give you some background here. So I listen to Decoder all the time and I love his car CEO interviews . But often I find myself saying, Neoli, why didn't you ask that question? So when he asked me to do this, I said, That's it. I'm going to bring on car CEOs . And I'm going to ask the questions I want. I see . And so you were back on the show in may twenty twenty one. Things have considerably changed in the world, in technology, in the country, at Ford . And I want to talk about all of those things. But something also changed for me. In twenty twenty three, I got a mustang Maki, as you know, I leased one . And that leases up next summer . Ah , so I'll be reading about your decision process . Well, that's, that's going to inform a lot of this conversation because I wanted to give you the chance to be the world's best car salesman to the most annoying customer. And so I'm going to think I think that's just going to set a lot of the backdrop of this conversation here . I love it . All right, so let's start there . Last month, you set a press conference that the MacE is not so great, that it's not the future of Ford . Why should I stick with a Ford EV next time? Well, we just won the new revised model Y versus Mahi drive evaluation by a pretty respected magazine. So I'm still pretty proud of the Maquie it's but you know we we knew what we knew then five years ago and and we now know what we know now. And those are, as you said, two different things . I would say that Ford in the second inning of product development has really understood more fully the opportunity to serve the EV market differently than we did several years ago and to execute a product with the right approach based on that those lessons learned . And that's both the consumer because we've learned kind of what consumers are willing to live with and not, like charging on the fly , as well as where in the market Ford should participate and put its limited resources . And I think you're going to find that the Ford EV product range will be much sharper , more specific more valuable to customers than it was when you last shopped. So let's dig into the news you just announced, which is that you have something called Ford Universal EV platform . What is that? And when is it coming? And more specifically, for me , will it be out next August? And will I be able to get that kind of new forward versus upgrade to my Maki ? Well, you'll you'll learn a lot more about the first product . It's a platform by next summer . We'll be out in twenty twenty seven, so just a few months after that. You know, we learned so much from the Machee. We've been number two to Tesla a long way behind them, but number two in the US market and EV sales, not that EV sales are the most important metric, but it does give you an indication that Ford has learned a lot and has served a lot of wonderful customers like you. We have all the data coming off the vehicle so we have learned a lot about customers . The platform that we shared in Kentucky last week is a breakthrough approach we believe to develop and deliver to customers an affordable electric platform where we'll develop several vehicles off that platform and launch them over the subsequent few years and that we can have a profitable vehicle that's sustainable in terms of the company's resources and make it in the U. S. , but in order to compete with the likes of BYD who we think are among the best in the world, we had to completely reinvent the platform for the customers . And there's a lot to that. I'm sure we'll get into it, but I would say in short , the evolution revolution of our thinking was to develop a vehicle for manufacturability to to radically reduce the cost and the complexity of the vehicle with all new thinking that is not embedded in a traditional car company . And to do that, we needed all new talent and we needed them to be separate from Ford , separate from our IT solutions that we use to develop and release parts , separate from a philosophy standpoint how to radically simplify the vehicle . And really get back to the basics of Ford, Henry Ford's idea of a universal car . Our first body style will be a pickup , but it's really not a pickup. It's a new silhouette, I would say . What I mean by that, it's got more room than a raf for, the best selling passer car in the US and that doesn't include its frunk and its pickup truck bed . It's very fast, it's re wheel drive, super fun to drive, and it has a digital experience that no one's seen at least that we've seen even in China, the digital experience is quite different for customers . I think the whole package of something has just not been offered in the US or anywhere to date and this first product I think was quite quite revolutionary . And this first product is what you're going to have out in twenty twenty seven . Yes . And you've mentioned BYD , which is a competitor out of China that is clearly making low cost, very high tech EVs here in the US, you're up against Tesla, you're up against GM, and you've mentioned that you are the second best selling EV, but GM has seemed to have some real luck going on with the equinox EVs and they're quickly taking off because of price . Is all of this this move to put this new platform out against this backdrop. Is it enough? Is it enough to compete both here and China? Well, for us to compete globally, no, it's not enough, but in North America, it's absolutely the right strategy, but it's not our complete strategy . You know, I think GM has fourteen name plates. We have three . We came out with our vehicles four or five years ago , and they're coming out with them now . So our product life cycles completely different than them . What I mean by that is we're about to launch our second generation of products. They have their first fourteen out now . I hope they outsell us. If I were if I were them with fourteen nameplates, say they should easily scale. I actually personally didn't think that we would be number two for three years with our simple lineup , but you know, it seems to have worked so far in the first inning. No, the competitive reality is that the Chinese are , you know, the seven hundred pound gorilla in our industry for EV's. There's no real competition from Tesla or GM or Ford with what we've seen from China . They are , you know, completely dominating the EV landscape globally and more and more outside of China . They have twenty million units locally, about eleven million are EV or E revs so half their market. I mean, we're barely the million vehicles here in the U. S. That's one tenth of the China volume and Europe 's only twice as big as us. So that's maybe only one fifth . And they're successful for good reason. They have great innovation, low cost. For example, they've bet on LFP technology, not these expensive lithium batteries . There's hundreds of companies. They're all sponsored by their local governments . So they have huge subsidies and they're new brands, you know, it's BYD and Gilli and you know companies like Neo and Xiaomi that have many of them never been in the car business before. And that's a big advantage for them. And so in China, the brands that are winning are indigenous brands and they're not global automotive companies . They're really, you know, Chinese companies . So to be them , you know, we really see a completely different approach . It's not a number of vehicles you have or the cost. It's I mean the price you offer the customer, everyone's going to have affordable EV's. The question is if you sell an affordable EV in the US for thirty thousand dollars, but it costs you fifty to make it, you know, you could say you have an affordable one, but that's not a sustainable business. So three or four years ago , we kind of saw this affordable kind of life cycle, the duty cycle of the customer changing with our sales and it became very obvious to us or to me personally that we have to go outside of Ford , create this Maverick group , give them resources and stay out of their way, but make sure that they delivered on a completely new approach because the Chinese are so formidable. They have so much support from their government. Their customers have such a high expectation for digital experience an incremental approach for Maki would never work. I love you telling it to me real straight here . And it's it's exactly what I was sort of thinking in terms of that in some ways, I'm driving a dinosaur, right? Which is the whole reason I leased a number of years back, which smart, smart move. Man, so much to unpack here. And Neil I's going to be so proud of me and with all the decoder questions that are coming up about how you're going to structure this new effort. But I want to go back to price. I was charging at Electrify America last week in Connecticut and four out of the six dolls had these chevy equinox EVs in them. And I asked this woman, how did she like hers ? And she said she liked it, but the thing she was really talking about was the price. She was really excited about the price. And she said, We like this car so much and the price. We actually got two. And she points to her husband who's in the other stall, which of course, I'm not thrilled that this family's taking up all these stalls, but it's fine. I forgive them. And I'm wondering if this is one of your motivating factors right now is just getting that price down so EVs can really finally take off in this more affordable area. I think Joanna to your point, it was inevitable that the government support would wane. It was inevitable that , you know, the duty cycle of an AV customer wound up being kind of, you know, people who use their car for commuting and, you know, shorter trips and occasionally taking a longer trip. But you know , this happened in nineteen teens, you know, in the teens in our industry over one hundred years ago, steam was ten percent or thirty percent , electric was thirty percent, the rest was internal combustion engine. And a few years later, it was totally different. But you know, back then you could not call which technology would win. It's same now. You know, the EV's came at the high end and I would even say forty thousand dollars is expensive now for most people . You know, we don't talk about in the car business because more than you know, two thirds of the car sold in the U. S. are used . And those two thirds we never really talk about, but their average pr ice is around thirty thousand dollars, something like that. The average new car is obviously much higher than that. So most of the vehicles that people are driving around in the US that are five years old are going to be around thirty thousand dollars and you know , this is this is the most important part of the EV market . It's not this expensive Lucids and Teslas and you know, that's all interesting . But what really is going to move this market is a non government subsidized , affordable EV that people can afford that's lower cost to use than a used model Y 'cause there's a lot of those around . And you know, people in America who have a tough time with all their demands and want to go on vacation and want to put their kids to college and they want to have, you know, a house or whatever it is, thirty thousand dollars is the most they want to spend . And that customer you met, I think is very typical So this next inning, sorry to use a baseball analogy is we're moving into this next inning , which is a completely different inning than the first inning , where the fitness of the companies , it doesn't rely on the government , that we have to innovate. And I said it last week and I'll emphasize now, there are no assurances that we can do this. No one's ever built a car in three pieces . No one's offered his own electric architecture at this price. No one , you know, we've never done it. We've never had two large unit castings and high quality. No one's done it. Tesla's talked about it, but they haven't done it. In fact, our manufacturing process has radically moved on beyond what Tesla has ever even shown in their unboxing . So there's a lot of risk here. This is not a this is not a guarantee at all that Ford's, you know, going to get this done . We need to take a quick break. We'll be right back . Support for the show comes from Outshift, Cisco's incubation engine. Today's AI agents operate in silos , which can limit their true potential. When it comes to AI advancement, companies out there have been focused on building bigger and smarter models . But scaling up is just one approach re.ach T suoperintellig ence together, Cisco says we need to do more. We need to scale out. To do this, they're going back to the blueprint from seventy thousand years ago. Humans just didn't get smarter individually . Rather, the cognitive revolution transformed society because we began sharing knowledge, goals, and innovation. And Cisco says that AI agents are now at that exact same inflection point. 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Everyone sees the full thread, making replies faster, and customers feel genuinely cared for. And Quo isn't just a phone system, it's a smart system. Quo's AI automatically logs calls, generates summaries, and highlights next steps so nothing gets lost. It can even qualify leads or respond after hours, ensuring your business stays responsive, even when you're finally offline. Make this a season where no opportunity and no customer slips away. Try Quo for free, plus get twenty percent off your first six months when you go to quo dot com slash decoder. That's Q T com slash decoder . Support for the show comes from Rippling . If you run a company, you know how important it is to retain your top talent. But instead of worrying about who's staying and who's going, try Rippling AI. Rippling AI is built on your live global workforce data, giving you full visibility into your business and the ability to stay ahead of the curve. Just ask Rippling AI, who are my top performers this year? And you'll instantly receive a workforce report flagging potentially at risk employees with supporting data like comp ratios, recent performance reviews, and engagement metrics. But it doesn't stop there. Rippling AI can turn these insights into a proposed retention strategy, including a recommended ten percent spot bonus for your top performers. All you have to do is tap confirm and the spot bonus is added to the next month's payroll. So don't settle for AI, that's all talk. Head to rippling dot AI slash decoder and get AI that turns insights into action. That's R I P L IN G . AI slash decoder. Sign up for exclusive access today . And we're back with Ford CEO Jim Far ley. Before the break, we were discussing Ford's new EV platform, competing with China, and why price plays such an important role in the electric car market. But now it was time to ask Farley the decoder questions. And in particular, how we thought about the structure of the team now responsible for overhauling Ford's EV strategy ? Well, you've segued really nicely into some of my next set of questions, which are the decoder questions , which is really you've set out to build something. And now you've got to figure out the structure to build it. You said you had to create a Maverick group. It was separate from Ford . It was separate from in terms of IT . And now you've got to take this Skunk Works Engineering team, which I believe is in California , and you've got to bring that into the big castle that is Ford . Yes . How do you think about integrating these new skunkworks ideas to this bigger system? I mean, do you have a map of how that's going to happen? Yes, we've been working on that for a couple years now . And you know, one of the things that really helped us in that regard was that Allen, the leader of this team, universal platform , he was free to have Fort People on his team , but he had the rights to say no to anyone. And so he went through a very rigorous process. So we have in manufacturing engineering the team that kind of is the scouts for the manufacturing process for all this new stuff. You know, he's had them on the team for three, four years. And of course, we've been kind of listening to them . And of course, we have a lot of good experience at Ford too that knows how to handle risk in supply chain and risk in manufacturing and new processes like the process we use with aluminum F one fifty different problem but same process of risk elimination . It's a plan that's come together, but like any plan , you know, it's important to have a plan, but pretty quickly you get out of the plan because you get surprised. The supplier isn't as good as you thought or they're running late or the software for this module's running late. And then you have to really derisk. And so the derisking is often or the way we're thinking about is let's make a really simple one first . Let's not try to add all the complexity. Why don't we just make one color , one version , one spec at the beginning and massively des imify the task for everyone . So what is that basic level of software capability for the vehicle? We don't have to have all the singing and dancing hands free automation from launch . Maybe we really focus only Blue Cruise on a simple operating domain like high speed safety hands off , you know , highway operations hands off for the autonomy solution . Then gradually as you verify the delivery of that base capability, whether it's the vehicle structure or the manufacturing process of the suppliers even automation , and then we then start to introduce more complexity and more capability over time when we feel comfortable . And that makes it stressful for the go to market team because they frankly aren't sure what they're going to be selling in a year and a half . But that's really the only way to do this. I think we found. I want to stay on some more decoder questions and kind of call you out because in your first decoder interview in twenty twenty one , you dodged the question, how do you make decisions? In fact, I was listening to the episode in my Maki last week and I'm just screaming Jim, you didn't answer. You answered this strategy of the company, but you didn't answer how you specifically make decisions. And I feel like you've had to make some big decisions here with this new platform . How do you do it? That's a very good question. In this case, let's just be specific in this case . I looked at the wiring loom and the Machee . It's a beautiful wiring loom, but it's seventy pounds heavier than the model Y wiring loom and it's two hundred dollars a battery to carry that wiring loom around, that's seventy pounds . And I just had to ask myself the question, can my team do it? Take the wiring loom as a metaphor can my team beat BYD ? And the answer I got personally that I went to Bill Ford and the board and my team, I said, I love you guys, but I think don't we can do this . So the decision I got to , which was highly informed by meeting Doug Fields , was, I think we had to do it separately, completely separately. And then when I started to really ask Doug , you know, who 's a model three chief engineer, worked on the car project at Apple, he was one of the first generation software designers in AOS . He also designed the Segway early in his career. I mean, he's been at the forefront of a lot of technology revolutions time and time again. I asked him , you know , why can't Ford do it? He's like, Jim , your part release system, your IT, your CAD design systems, they're twenty five years uncompetitive There's no way you can beat BYD with that. You need expertise. BYD has vertical integration, the batteries, the batteries are thirty percent cheaper than what we can buy from CATL For us to beat that battery, to be even in the neighborhood of cost , we have to radically redesign efficiency of the motors, gearboxes and averters on the EV side , so it uses thirty percent less batteries because we can't beat BYD's, vertical integration on the cost of battery. The only way we can beat them was with the innovation on the draw of the battery And when I got the whole list of inventory from Doug about what we have to do to be OYD even three, four years ago , it just became very obvious to me that I had to look my team in the eyes and say, eventually we're going to come back to you for the industrialization of this product . But for now , leave these people alone , trust that they don't have any prejudice to come up with something better . And if you want to get mad at me, you can come in my office and shout at me , but don't waste their time . And I had and I talked to Bill , I asked Bill to go. And I also do gemba. So I make every big decision I ever make, I go in person . And so I went to that tear down and I went to look at every piece. I looked at the number of fasteners in a model Y. It was literally a third of the fasteners that go into a Maki . And you know, from a customer standpoint, you won't tell the difference, but from a manufacturability standpoint and a cost standpoint, you know, fasteners are kind of like it's an output metric for how elegant the simplicity of your engineering solution is . And when I looked at those fasteners, when I looked at the wiring loom , I knew I had no choice. Because I gimbled it and I really talked to people that knew and I can't put the company's future at risk by making people happy . I have to do the right thing . In that particular decision, that's how I approached it. Can I interpret you real quick to tell me what Gemba is? Gemba is something that I fell in love with the Toyota. Gemba is Genji Gimbutsu, which is a Japanese word for go and see with your own eyes. Learn with your own eyes . And it really is actually the five senses. The idea is before you make a big decision or before you want to understand a problem even , it's a tool in problem solving . You have to go and see the real problem, where the waste is . So in my case, the waste was that wiring harness, those fasteners , you know, all the all the welded together front and rear structures that eventually unicasted unicasting displaced . You see the waste. You look at it, you talk to the people, the engineers . Why are we why, do we have this waste ? Why do we use a twenty five year old parts release system? And as a leader, you get down on the floor and you ask them the basic questions so you can visualize your decision . That's what GEMBA is. Love that. Didn't know that before. I need to practice Gemba clearly I want to talk about you have to restructure your company now, but it also seems like you've been talking about restructuring the economy. You've been talking about a refocus on the essential economy, blue collar jobs that are the backbone of this country. You wrote a LinkedIn essay in June about the focus of AI on white collar productivity, but that we need to do the same for blue collar work. So how are you thinking about automation at Ford? Well, we have a complete crisis in the country that's not talked about . People like Mike Row will talk about it , but we have a crisis that's kind of not in the public debate . We have half a million short fall of construction workers . We have a half a million shortfall of factory workers . Our emergency services , we don't have enough people to support our society when things go wrong , firemen ambulance , medical , the frontline people that make our society run that we all take many of us take for granted, plumbers, electricians , we call the essentially economy. And we see that at Ford because we're in the edge of this software defined vehicle, but we're also a heavy manufacturing industrial company. And whether it's a technician shortage and our dealerships to work on these vehicles or the shortage of our factory workers , I really learned as a leader during during the UAW strike , you know, what a crisis we have as a country. And I see it with our customers , our plumbers and electricians are constantly trying to get young people into those vocations. And there's no training . The trade schools and the apprentice programs are not there anymore that our grandparents all made this country so great. And we're very vulnerable as a country. The productivity, as you said, of those, you know, essential workers is is behind white collar , automation, AI deployment, you know, everything has happened for all the tools in white collar, there's not the same and there's very little training. Companies like Ford , thankfully, have enough resources that we can put our backs behind this problem with trade schools and scholarships and stuff, but our society isn't doing it. In fact, we're going to have a conference here in Detroit or in the fall in about a month where we're going to gather other companies that have the same problem that really see it, solution providers and academia and creative people in government where we're going to try to start to work this problem . Is it a farm aid or medical crisis like COVID? No, it's more in a way, it's just as threatening to our society . And the way we're thinking about it is we're going to walk the walk ourselves, invest heavily . We have been. We've we spent about a billion dollars on the dignity of workplace and safety in our plants. We've modernized our build . You know , we're investing in trade schools and scholarships to recruit technicians for our vehicle repair as well as our factory workers. But this is a society problem. And the one that bothers me the most is cultural , where we kind of as a culture think that everyone has to go to an Ivy League school to be valuable in our society. And yet we all know that our parents and grandparents kind of made our country wonderful because of these kinds of jobs. And there's incredible dignity , you know, in emergency services and you know, people can have wonderful careers , but our society doesn't celebrate those people like they do the latest engineer for AI. Yeah, and that's exactly where I wanted to ask you. I mean, this seems like such a reversal of decades of messaging in America, which is get out of manufacturing, go to the office. Is your advice to this next generation with AI actually get a job in manufacturing ? I think it would help all of us as a society . Look, my son is seventeen. He's a senior in high school . He and look, he's, you know, he's got every opportunity that you could ever imagine, you know, he doesn't have to worry like most people . And I made sure that he had a summer job where he learned how to weld , he learned how to fabricate, he learned how to really work with his hands and relate to people and he can make a choice. And I have no prejudice for Jameson. If he turns out to be the greatest welder or a mechanic working on our super duty diesel engines, I will be so thrilled as parent . And I think we all need to kind of look at ourselves and decide what kind of society we want to build in America . And it's not, you know, and look, let's say our national defense we're getting in a war somewhere. Google's not going to make the boots , but Ford will . And to defend our own country , we need these people and now we're in critical critical issues . You know, the average ambulance is fifteen years old . You know, we do not have enough emergency care people. Look at what the firemen are having to go to in California now with the smoke and you know their own health . I mean these are very dangerous jobs and we have a shortage and it's going to affect all of us in a lot of annoying ways. And if we don't really get serious about kind of readjusting our expectations for our kids and the younger people in our country to give them opportunities to grow and these are great jobs fact.ory A job at Ford's, you know, could be way over a hundred thousand dollars a year . And you can bridge into a lot of other things. My grandfather was a factory worker at Ford and he became a Ford dealer late in his life in his sixties . You know, think about the possibility he was an orphan. He had nothing. He never went to college . It didn't matter to him . So yeah, I'm really excited and energized about this. It's a much bigger problem than fixing Ford and making Ford a world class company. It's important for our country . And we need to focus on this just as much as you know how exciting the new AI is and the new social media dance on Instagram . You know, let's get busy on these important problems . We need to take another break. We'll be right back right back . Support for the show comes from Service Now . AI was supposed to handle the parts of the job you hate. Instead, it just describes them, suggests what to do about them, and then leaves you to do it. That's not help, that's homework. ServiceNow's AI specialists are different. They're not a tool. Think of them as digital teammates who actually do the work from start to finish. Cases get resolved, requests get processed, loops get closed, and most importantly, no extra work for you . Because when you can truly delegate to AI , you can get back to the work only you can do, the work that requires a person with ideas and judgment, and you know , a pulse. To learn how to put AI to work for people, vis butit service now . com . Support for this show comes from Clavio . 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You have a night for yourself but don't like the sound of the silence so you turn on the TV just for the ambiance. It's a little trick. It helps you feel like you've got company and aren't alone. And other insurers, well, they may make you feel alone. But when you switch to GICO, you've got claims reps available around the clock. So whenever you need, you'll have people around to help . And let's turn on the washing machine just for good measure Isn't that soothing? It feels good to have support. It feels good to gecko And we're back with Ford CEO Jim Farley. Before the break, Farley was really diving deep into his personal philosophy around blue collar work in America, and how he thinks, especially with the backdrop of AI, we need to be training the next generation of Americans to consider jobs in Ford's factories, in emergency services, and in trade work. But now I wanted to change gears and ask Jim a very specific question from a very special guest on my show . I do have a call in question from a guest caller. Good. Hey, Jim, it's Eli. I'm very excited to be calling in with this question. So as you know, I'm a Mustang guy. I have a twenty twenty one Mustang GT convertible. It's one of my favorite cars ever. People love this car because it's so easily modelable and tunablee. You can just rerogram the ECU to make the car go faster. The new version of the gas mustang, one with all the screens running on your new platform, the ECUs are locked. People can't just reprogram them. And a lot of enthusiasts attribute the recent drop in sales of gas powered mustangs to the locked ECUs. So my questions are, do you agree with that that the locked ECUs are behind the recent drop in gas powered mustang sales? And do you have a plan to let people unlock the ECU s and tune the car more easily. Thanks for answering the question. Jonah, I'm sure you're doing a great job I have no idea what that question means. So I'm going to give you tim aer. You get a minute to answer that . Well, I have this debate with my son actually , 'cause he has an older mustang, and he didn't buy the new one for some reasons like that. So I would say the drop in sales absolutely not due to that . Actually, we're doing really well with Mustang and I think we're kind of the only one left really, which we're quite proud of , and we're investing a lot in Mustang . So and I think that the thing that people don't get about Mustang is the global car. It's the best selling sports coup in the world. And we actually outsell Mustang outside of the US than inside the U. S. So when I look at sales for Mustang, I look at globally . And some of our biggest countries like Australia and Sweden, other areas , the Mustang continues to grow because people want a little slice of that America . Everyone wants to do a burnout . And as far as the tunability of the vehicle, you know, I think the call in question is an outstanding question for this . This is a real dilemma for us . And there's no real easy answer . We want people to modify their cars , but we also have to take quality really seriously and of course privacy as well . I think he was talking more about the performance of the vehicle. And so our approach would be to give people over time an option to digitally adjust their vehicle from Ford so that we can maintain the quality but still have the user have their own kind of idea of performance . And that's for everyone . And I think that vision will come to life in the coming years . The aftermarket is a real kind of opportunity, but it's also a big challenge for us because a lot of people like to write software in the control module that controls the powertrain that gets better performance. But what they don't know and what the user may not be aware of is all the reli ability and the quality issues that they may be bringing up that are very expensive. My daughter's boyfriend is one of these people. He bought a brand new F one hundred fifty, he's got a supercharger on it . And you know, he recently had a bunch of error codes because he updated the ECU against Ford's standards and now he has thousands and thousands of dollars of expensive rep airs because the vehicle has started chewing. It's a campshaft . And you know, it was great that he could get six hundred fifty horsepower out of his Eco Boost F one hundred fifty . He didn't think about what he was doing to the reliability of the vehicle , but we have to at Ford . So all I would say is it's a tough problem to solve. We always want to give customers the chance to tune their vehicles , but we actually know a lot about the reliability of the vehicle . And are we as a brand going to suffer our quality reputation to give that person the ability to modify the vehicle. I think that 's a hard compromise for us to make. I actually understood most of it. I want to move on to the big te a, the tariffs in the room. Last quarter , you operated at a loss despite record revenues because you took eight hundred million in tariff charges in Q two . When tariffs were actually lower than they were now , what are your conversations like right now with the administration? Well, they're very important . Ford is the most American company in terms of the quantity of vehicles we make in the U. S. over eighty percent of our vehicles sold here are made here. But we also are the largest importer of parts . And the discussion we're having with the administration today really covers street policy areas a tailpipe emissions , tax policy, and especially tariffs . On tariffs, the biggest issue is the bill, the two billion dollars bill that we have for our imported parts . And because we make the most in the U. S., we import the most parts. And we have a lot of stackable tariffs. There's fentennel tariffs, three hundred ones from China, we have steel and aluminum tariffs that are now over fifty percent . So there's a lot of tariffs that a company like Ford gets because they're auto specific tariffs and they're not auto specific tariffs. They all stack up. And so we have this layering of all these imported part s and to make an F one hundred fifty affordable , you know, there are a lot of parts that we can't make locally, wiring looms, fasteners , thousands and thousands of parts that we have to import because we actually can't even buy them locally in the U. S. And if we did, the vehicle would be one hundred, two hundred dollars a month too expensive for customers . And our discussions with Washington are really clear. Look, you know, you and we both agree let's strengthen U. S. companies like Ford that are better on America. We have more UAW jobs than anyone, but don't penalize us for trying to make the vehicle affordable. And so we've had very productive discussions with commerce and the president himself and the whole administration , but how can we come up with a way to minimize this two billion doll ar so that it actually we are advantaged as a company . And you know, originally they were thinking that there would be high tariffs for finished automotive vehicles. fifty percent of all vehicles bought in the US are imported through a port or through a rail across a border . And now the standard tariff, it looks like it's going to be about fifteen percent, twelve and half from Japan And that's not a fair fight . And you know , we're just asking for a fair fight. So look, if you're going to allow people to import with fifteen percent tariffs, that includes their parts in the vehicle or fifteen percent tariffs, but you know, you put a fifty or sixty percent, seventy percent tariff on our aluminum steel that goes into our U. S. May vehicle, you know, hey, let's work on something a process for tariff relief that would allow us to do that and still make the vehicles affordable. And that's what we're talking to the administration. They're extremely open . They're extremely supportive of us . They're also making a lot of policy changes on tailpipe emissions and tax as well . Look at the EV credits as an example. We can get to that if you want, but the tariffs are the most critical for our profitability. About twenty percent of our profit is evaporated now because of these parts tariff. And we're highly engaged with the administration. We remain, I remain personally very optimistic that we will find a solution, but it is very expensive. I wanted to ask about the EV credits because between the tariffs, the EV credits going away , it feels like is this administration on your side? Yet you also are adding more jobs than ever to manufacturing here in the U . S. you're doing the things the president wants . Yes . Well, I do believe that generally those three areas of policy are very important . We didn't , I guess, Joanna, we didn't really feel like we should get a seven thousand five hundred dollars check on an EV to make the transition successful. We do need support for the production tax credit on batteries so that we can be competitive with China on batteries because they have such a huge advantage and we do need to onshore that IP and start to really scale battery manufacturer because you can't ship a battery overseas. It's very heavy and it's not a good shipper. What we say is a shipper. So we have gotten a lot of support from them for making batteries here in the U. S. The PTC credit is very important. We have changed our investment on EVs to not depend on the consumer tax credit from the government. And I think that and we're fine with that . Other countries do support in Europe and China, their EV consumers . We didn't ever really expect that of four. We're kind of lifted ourselves up by the bootstraps kind of company anyway. So that was something we did anyways . But I'd say the relief of the fuel economy standards is, you know, a very important topic that the administration clearly has a point of view on. And we want one national standard and we want to be able to sell what customers really want. And hybrids are really popular now and so are EV's . So I think we'll find a tailpipe emissions that is more reasonable and sustainable and not have a bunch of states have you know unique standards that makes logistics for the cars a nightmare to send different states different emissions standard cars and that's really expensive for customers too. I think the real area that is super critical for Ford and for companies like Ford, as you said, that are committed to the US is tariffs. Working through and making adjustments as the tariffs get announced and deals trade bilateral trade, deals get announced . You know, we need to find a landing spot that works for companies like Ford , where it's a playing level playing field from a tariff standpoint and the administration accomplishes what it wants to accomplish . And we're not there yet, and that's why we're working really hard. I spend a lot of time on DC and there's a good reason for it. This is really important for our factory workers, for the future of our country, and for the shareholders of Ford . And we're going to we're not going to rest until we find a solution. I want to come back to me. This is really this whole podcast is about me ob,viously . And where we know that one of the main reasons I decided to get the Maki other than it had good range and I love the way it drives was the fact that it had carplay. Some of your competitors have banded carplay. A lot of the newer upstart car companies have their own software like Rivian, like Tesla. I want to talk about this new digital experience you guys are working on, but I want to just cut to the chase about carplay . What about CarPlay Ultra? Are you considering that? We are. We don't like the execution in round one of Ultra , but we're very committed to Apple. I've talked to Tim many times about this . Ford does not have the rights in my opinion of disrupting someone's digital life when they get in their car. We want you, Joanna, and all the customers to bring, whether it's , you know , whatever phone, whatever digital life you bring in, we wanted to make it as easy as possible. We don't think we should restrict that to make money off the customers. We don't want it to be a hassle . We don't think we're we don't think we can design an experience that's, you know, that's going to displace your phone . And yet, at the same time, whether it's automated systems or the way a trip gets plann ed. There are things that Ford is working on to add on top of that digital experience of Google and CarPlay that will make it even better. And we're highly informed by what's going on in China right now. The customer experience part of China , let's say an AI assistant in the car. Very important for Ford . We think that every customer should have an AI assistant in the car, not just a voice to move to your phone based AI system , but something specific and that you can talk to almost like a companion. We really believe it's a more complicated journey for us to execute to allow everyone to bring their digital life into the car and have it seamlessly integrated . And then also put on top of that whether, it's a productivity software, we're now up to a million subscriptions now for our pro customers or whether it's Blue Cruise or whether it's how you plan a trip . The auto specific things like how your eight ass system work s and how it integrates into your entertainment system , we believe we have to design something that works with your digital life as well. It's a more complicated choice , especially when you look at backcast ing it into all of our past vehicles , but I believe it's a more customer centric approach . And you will see that, Joanna and your next shopping , you know, you'll make that choice. We'll all read about it . But I think that's our philosophy. Now other companies have different philosophies . But we believe that our philosophy is the most customer centric. But it seems like with the four digital experience which you have rolled out to some cars, it's based on Android Automotive , that you're going to have to choose are you going to do this Android automotive experience with the things you're talking about building on top of or are you going to pick a car play ultra experience which is, really going on . I see what you mean . Yeah, it's a really good question . I don't know where Apple's going to go . I think Apple has to make a big decision. It's not a forward decision actually And then based on their decision, we will decide . You mean Apple has to make a decision, are you going to allow this to also run in combination with other software ? Yeah. Not only that, but are you are going to are you going to allow OEMs with the control of the vehicles? Like how far do you want the Apple brand to go? Do you want the Apple brand to start the car ? Do you want the Apple brand to limit the speed ? Do you want the Apple brand to limit the access ? And we're doing that now for our pro customers. If you're a pro customer, you can limit access to the car the vehicle on the weekend because many of our plumbers and electricians say they have a company vehicle and they're not really allowed to use it on the weekend or we allow speed control now can't go above the speed limit. You know, is Apple going to want to do that? If Apple wants to do that, I think we're going to have a tough time with that because then the digital experience gets really messy and we'll have to decide Google and Apple to your point. Now Google has two different layers. They have the Google Automotive Services, which is kind of a curated services digital experience in the car, but they also have Android Auto, which is actually an operating system that we can build our own experience on top of. And so Google as a platform company gives us a both . Apple's had totally different approach . And again, I've talked to the Apple team and our team is in contact contact with them . I think Apple has to decide, do they want control of the entire experience inside a vehicle? If they do, they want to follow Ultra and the Ultra two or whatever it's going to be next, then I think Ford will have to make a big decision. And I kind of know where we would go . We don't want we just believe eight ass integration with your entertainment system is so critical. When you're flying down the highway with your eyes off the road in three or four years at eighty miles an hour on the I five and you know, you're watching a movie or whatever we're going to be all doing or having a chad GPT moment or having a wearable on , you know , we just don't think that a system from tech companies not integrated the car is going to save your life. That sounds to me then that you're really forced with reality that you've got to build your own. Yes, yes. But the good thing is now versus five years ago when or a couple years ago when you and I talked, you know , the Google Google Android Auto is really advancing nicely . And we've learned a lot about how to build the experience on that. So for us, a lot of OMEs, I hear a lot of OMEs say, well , it's about control the customer. I don't want Apple to be able to, you know, that's not a big deal for us. We just want it to be easy for customers . But if those companies want to control the vehicle . Like I just I think that's a bridge too far and in that case we do have to we do have to invest a lot more in a forward experience. I hope that doesn't happen by the way . I look at what has happened with Mi and Huawei and Xiaomi and China. It's amazing. Those companies are totally all in on auto. You know, when you're a Huawei or Xiaomi customer , you know, you either buy a Huawei system in someone else's brand or you buy a Xiaomi car and it's completely seamless . And I wish our wish our tech companies had approached the auto industry that way, but they haven't. You said something really interesting about how you want to have an AI companion in the car. And I am actually spending a lot of time in the car now talking to Chat GPT. Listen Encoder. I have my Yeah, I have my iPhone bluetooth it's coming through Carplay. It's Bluetooth paired and I've got my chat GPT app. I'm not looking at it. It's safe right and I'm just have it in voice mode I.' Andm driving to a meeting, driving a meeting to meet you and say, tell me a little bit about what I should know about Jim Farley, where he's been in the news. It's a very interactive conversation, almost like I'm on the phone. Yes . How do you think about this? Does Ford have to be a part of that relationship? It's a good question. I think yes , especially for the transportation related. I want to go somewhere. I want to know about my car and the condition of the car. I think we either have to be part of the conversation or we have to supply that. We actually think not to be arrogant because the safety control and the vehicle control, we think that we can provide a chat experience that is added value beyond your non vehicle experience . But to your point , we don't want to burden the customer with two different experiences . That would be really arrogant and really bad for the company . And I think just in general, what you're bringing up, Joanne and you've been on this for many years, but I think people are starting to realize why you've been on is that the difference between car companies when you have a software defined vehicles is not going to be what your sheet metal looks like. It won't be how powerful your EV motor is. That's all math. All the cars look nice. It's going to be this digital experience of why someone buys this or that . And so we have to sort this out really thoughtfully. Now in China , I think China Nio has an AI companion in the car. It's like a physical thing. It's like a little person that's your companion. And it works really well and customers love it . So I think if you look at China being ahead of the west in terms of integrating AI as a companion in your vehicle, the early indications are that a companion like functionality from the OEM done really well can add a lot of value to people's lives . And that's the direction we're going similar to not investing in level four autonomy and robotaxi, but putting our effort in the AI space for automation driving into level three high speed eyes off. It's a similar kind of b.ed Just pick a few places where Ford can add value , but don't make the customer go backwards . That's kind of our philosophy. To be clear there though, you are you're more focused on that highway driving experience right now with Blue Cruise. Yes. For sure. Yeah. Our number one priority is to have to not be the first one to do eyes off level three highway driving but be the best the most reliable and the safest and the one that you want to use for you and your loved ones . And we're we took all the Argo people and we gave them a choice . You know, do you want to do highway high speed eyes off, push a button, you know, watch a movie, whatever people want to do . could We do this podcast in your car, you know, whatever . That's where all of our AI deployment for autonomous driving. Because we think that's a cooler problem to solve for most average Americans than aerobotaxi. Even though a robotaxi is really cool problem. I love being in a way mo , you know, we think that highway miles are a bigger society opportunity. My last question here , you get to play car salesmen . It's next August . I got to get rid of this Macee . What do you what do I do? You need to buy another Macee. We've improved it a lot since your last one . It's a lot more affordable . We have We have some wonderful new experiences and I'm going to give you a run for your money in terms of value. It's a really incredible product that we 've refined over four years now and the Makis we're making now are pretty radically different than the ones we have OTA car and I know the improvements in that, but the new vehicle the, compute power on board , the efficiency, the quality , the improvements to the fit and finish are all material enough that I think you should absolutely