Ford Pro CEO details the ‘tremendous demand’ for electric vehicles

Ford Pro CEO Ted Cannis joins Yahoo Finance Live to discuss Ford's enterprise business, the demand for electric vehicle fleets, competition in the EV space, and the charging network in the U.S.

Video transcript

[MUSIC PLAYING]

JIM FARLEY: We're really on a mission at Ford to lead an electric and digital revolution for many, not few. And I have to say, the shining light for us at Ford is this beautiful lightning made right down the road in Dearborn, right here in the State of Michigan. Already, the leader of all EV pickup trucks in our industry in the United States. Take that, Elon Musk.

BRIAN SOZZI: That was Ford CEO Jim Farley on the company's EV leadership. He gets into Ford's mission to lead an electric and the digital revolution. Here to walk us through the path to that goal is Ford Pro CEO Ted Cannis. Ted, good to see you here. So your segment really focuses on the commercial side of the business. What has demand been like?

TED CANNIS: This is a fantastic. We really formed this unit to really focus on commercial and government customers who also want to make that journey to electrification. We handle both the internal combustion side and the battery life. And demand is through the roof.

BRAD SMITH: Let's talk about that demand. Can you quantify that for us just a little bit more? Especially when you think about some of the government spending that is really focused on electrification right now.

TED CANNIS: So we have-- both on the government side, like here in the State of New York, we have plenty of customers there. We're up to 3,500 E transits sold here in the US so far this year. That's 95% share of the electric band market. It's a tremendous demand. In Europe, it's over 8,000 orders. So you're talking a lot of interest in going electric.

BRIAN SOZZI: I love what you said at the JPMorgan conference yesterday. You said, you're a guy that knows high levels of inflation. You worked-- used to work in Brazil, right?

TED CANNIS: I did.

BRIAN SOZZI: And, you know, we're seeing still inflation is coming down here, but it remains very high. What is the pricing look like on these vehicles? Have you had to take price increases on vans and trucks?

TED CANNIS: We have. Obviously, inflation is high in the economy right now. And in these raw material mineral prices that are coming through and flowing through into the product, we raised prices consistent with other companies who have done more in that space. Because with the high demand, we still have the opportunity to do something for the company, but a lot for the customers.

BRAD SMITH: Let's talk about the production as well within that, because it comes down to where you're able to get and continue to source raw materials. These are the long-standing partnerships that you have on that supply chain front. But even when we do have a supply chain slow up or hiccups along the course of this year and even last year, how have you been able to navigate that? Where is it starting to perhaps alleviate as well, as you're producing the Ford Pro vehicle lineup?

TED CANNIS: Well, certainly, that supply chain in all at months was very, complicated, the chips. And securing battery sources for long term is one of our main goals for '23 and '26, as our ramp rate increases a lot. But really, it's been tough for our customers. They really are high demand for the vehicles. They've had-- they couldn't satisfy those needs. And you're running a business, you're doing roofing, or plumbing, or construction, you need those vehicles to do your businesses. And it's been really a short supply situation. And it continues to be.

BRIAN SOZZI: Is one of the things that may just hold back growth in the EV transit or the commercial side of the business, no public charging? It's still hard to find, I would imagine, charging stations for these various vehicles.

TED CANNIS: Well, it's interesting, we did a Fleetbuster survey to figure out where are fleet decision-makers in the US, in UK, and Germany. And 60% say it's going to be a headache going into electrification. And headache number one, charging.

And what's interesting, for commercial customers-- at first they think, I'm gonna go to public charging, like you and me. But actually, they find out, you know what? I'm gonna pay an employee to sit there to charge her at higher rates with no reservations at the charger and go out of the way.

So we have Ford Pro charging. We you can set up them to do charging at home. Split the bill between the refrigerator and the employee, or set up a charging operation at their site where they can charge overnight at the right rates, and make it all work for them. All built and backed by Ford.

BRAD SMITH: Where there's still some of the synergies between-- and even after some of the kind of redefining of the Ford model E business? You've also got, of course, the Ford ICE business, the traditional business. And then for Ford Pro. Which when all of these things come together, how should people think about where those synergies still are? Where even the headcount is perhaps distributed to make sure that all of these orders are still being delivered on?

TED CANNIS: That's a great question. So as we reform the business and do these new business units, as we head that direction, in our case at Pro, our customers flip their fleets about 10% to 15% of the fleet per year. They can't switch them all at once. So they're gonna have internal combustion and battery electrics for years. So we offer both. We're really proud of our internal combustion vehicles and we're really proud of the electric ones, as we moved them to Lightning and others.

And the other units are focused on what they do best as well. Our internal combustion blue unit, Broncos, and Super Dutys, and Mustangs, these are vehicles-- the new Maverick, high demand. Where we're really strong, tough off-road, off-grid heavy loads. Really cool vehicles. And the electric model, E guys focus on those electric customers and their ecosystem.

BRAD SMITH: What needs to take place in terms of the network infrastructure for charging, in order to see more of your customers actually opt-in to the electric vehicle side of the Ford Pro business?

TED CANNIS: So in the Pro business, it's a little bit easier because we're providing the charging with solutions. Clearly, the public private partnerships helps in all of this to move the whole process faster. But in our cases, they can pencil the answer. These guys are-- these are businesses that work on Excel spreadsheets. They know repair costs, fuel prices, which are going up. It can pencil that cost of ownership to make the decision that electric is good for me because it's just good for business.

BRIAN SOZZI: I've talked to Jim Farley a number of times. I mean, he's fired up the whole company. It really is different company compared to prior leadership at Ford. But when you hear them hop on stage yesterday and say, "Take that, Elon Musk." What do you think?

TED CANNIS: I think we have to respect all our competitors in this space. You know, you can learn a lot from everybody. Elon led the way in electrification for many around the world and you got to respect that. We're great in commercial businesses, like pickups and vans. And that's where we bet on. And things that we really know well, Mustangs, and F-150, and Transits.

And everybody has to pick their thing that they're strongest at and really lean into it. And Jim leans into strength, so it's great to have him at the helm, driving production, battery, resources, and it's a lot of excitement.

BRAD SMITH: Ford Pro CEO Ted Cannis, so great to have you here in the studio with us for the conversation.

TED CANNIS: Thanks a lot, Brad. Brian, thanks.

BRIAN SOZZI: Sure.