Ford Motor Co F CEO Jim Farley said he believes automakers need to plow through challenges to make electric vehicles affordable for the average buyer, The Detroit News reported on Saturday, citing a live-streamed Detroit Homecoming VIII interview.
What Happened: Farley noted key issues like labor concerns and battery supply as some of the key hindrances to making electric vehicles affordable for automakers.
He said a key issue is how production will impact labor concerns since it costs 30% less to manufacture electrical vehicles. There also is an issue of battery supply and minerals such as lithium and cobalt to power them.
"We have to bring battery production here, but the supply chain has to go all the way to the mines. That's where the real cost is and people in the U.S. don't want mining in their neighborhoods," Farley said, as per the Detroit News.
“Average people cannot afford these vehicles and we have a lot of work to do to make them more affordable....that’s the one that keeps me up at night,” Farley said during the discussion at the annual event being held since 2014.
See Also: Tesla Strikes Deal With Australia's BHP To Secure Nickel Supply
Why It Matters: Ford is expected to begin delivering the F-150 Lightning — the electric version of its most profitable and popular pickup truck— early next year at a ticket price of $39,974 onwards for the base model and a range of 230 miles.
Farley told the audience that F-150 Lightning has secured 150,000 orders and it is completely sold out in Europe, in the U.S, and in China.
Electric vehicle makers such as Tesla Inc TSLA, General Motor Co GM and others are rushing to secure their supplies of key ingredients that go into making the batteries that can charge faster and last longer, including minerals such as lithium and cobalt.
With rising demand, lithium — one of the metals used in battery production — is being seen as the new oil. Though with all the potential that it brings, the metals are also mired in the environmental and sociological impact of mining, with several protests in the U.S. and Europe around the proposed mining.
Currently, nearly all of the global electric vehicle batteries are made by Asian companies like CATL, LG, Samsung and SK Innovation; industry experts estimate it will take years for the U.S. and Europe to catch up.
Price Action: Ford shares closed 0.51% higher at $13.78 a share on Friday.
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Photo: Courtesy of Ford
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