Ushering the US auto industry into a new energy era
Jim Farley is the president and CEO of Ford Motor Company. This essay is part of the Global Energy Agenda.
Political and policy change are part of the American democratic experiment and integral to the business landscape. As the auto industry navigates its transformation, it’s important to keep the choices and needs of the customer front and center. Automakers must prioritize choice for our customers, listening to their preferences at every turn. That is our north star, and it is a valuable lesson for all of us in the automobile industry and for those who have a role in how we build our global energy future. We must put people first.
It starts with listening to the people who use our products in a thousand ways, big and small, every day. Whether it’s dropping kids off at school or towing heavy equipment, a diverse vehicle lineup serves customers in unique ways. We want to give customers services and experiences they can’t live without. Automakers will continue to build iconic gas-powered vehicles that customers love. We’ll also innovate new forms of hybrid powertrains that fit the way that Americans work and play.
And the industry will be making new electric cars, trucks, and vans with technological innovations to take the driving experience to new levels of performance. The next generation of electric vehicles will be even better and include features that customers haven’t yet imagined.
It is imperative for the future of domestic manufacturing that the best electric cars in the world are made by American automakers. But domestic automakers face stiff international competition in this race. To win, our focus must be clear: The United States cannot cede energy, innovation, or manufacturing leadership to China, Europe, or other regions. If we want to maintain our competitive edge while securing our supply chains and shoring up our manufacturing capacity, we must invest in America’s auto industry.
We can win this race because we have the road map. When it comes to history’s most pivotal achievements, Americans have led the way—from the moon landing to the microchip to artificial intelligence. US automaking history, like Ford’s, is entwined with America’s greatest moments of achievement: the moving assembly line, converting automobile factories to military factories in World War II, and retooling our operations to build lifesaving equipment during the COVID-19 pandemic.
This is another moment of upheaval in our industry, and in the global economy as a whole. And if we are going to meet the demands of Americans and our future, we need to adopt the same kind of mindset that has always set our country apart.
This is important because today, as we navigate winning the energy, technological, and manufacturing future, we have a burst of new innovations at our doorstep and increasingly intricate supply chains around the world. We face both uncertainty and great opportunity.
We must build the necessary manufacturing plants and components—including the batteries and materials that will power our future—here on our shores. An America that controls its own supply chains, that invests in cutting-edge technology, and that brings innovation home is one that secures its future. Right now, Ford is doing that through industry-leading investments in multiple states, where we’re building vehicles Americans want today and making big bets on the high-tech vehicles of the future.
We know that battery demand in the United States has grown and that China controls key sectors of our energy supply chain. It’s why US automakers have taken bold steps to scale our advanced battery manufacturing right here in America. Investments to onshore this battery technology are an essential part of improving affordability and availability of choice for Americans. It will take time and commitment to build up this capability in the United States, but the more we delay, the greater our reliance on foreign materials will be and the farther behind American auto companies will fall. If American companies don’t do this, those in other nations will.
Onshoring our manufacturing also protects us from geopolitical conflicts, pain points, and uncertainty. Last year, we saw escalations of war and conflict around energy-producing countries. When we invest in American facilities, there is less risk to the American people.
I am confident that we can step up to the task at hand. The US auto industry will be working with policymakers to prioritize American manufacturing and energy security. We’ll collaborate to ensure America sets the terms in the great energy race, so that our auto industry and manufacturing sector continue to lead the world. And we’ll make smarter decisions for our country if we keep the choices and needs of Americans front and center.
The United States was built for moments like this, and we will continue to usher the auto industry into a new era by investing in our team, our customers, our country, and our future.
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The Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to net-zero emissions.
Image: New Ford Mustang automobiles are shown for sale after California Governor Gavin Newsom announced the state will ban the sale of new gasoline powered passenger cars and trucks starting in 2035 in a dramatic move to shift to electric vehicles to curtail greenhouse gas emissions, in Carlsbad, California, U.S., September 23, 2020. REUTERS/Mike Blake