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Yahoo Finance Presents: Ford President & CEO Jim Farley

Ford President and CEO Jim Farley joins Yahoo Finance’s Pras Subramanian at the Red Bull Event in New York City to discuss its partnership with Red Bull, its return to Formula 1, and the growth of the company.

Video transcript


PRAS SUBRAMANIAN: Big day here in New York. The Red Bull car reveal, but also Ford joining Red Bull in 2026 an engine partner. Ford CEO Jim Farley joins me now. So Jim, how did this deal come about? How did you guys sort of make this deal to join-- rejoin F1 again?

JIM FARLEY: Well, we started looking at it when F1 committed to sustainable fuels. Then we started to say, the popularity of Formula One we thought was going to really grow, which it did, in the US. And we knew we had a lot of EVs to sell.


And we think that the drivers and the sport are kind of the right platform, versus a Super Bowl commercial. There's a Super Bowl commercial every weekend. And then we had to find the right partnership, and we want to be at the top of the grid. Red Bull's there. They got the best resources.

And the hybrid engine was, like, perfect. We're number two in hybrids in the US. We have a lot of battery tech they need. They have a lot of aero that we need for electric vehicles. So we put the deal together just a couple months ago, actually. But we've been studying for two years.

PRAS SUBRAMANIAN: So this is basically-- it's a powertrain partnership in 2026, when the new engine regs come into place.


PRAS SUBRAMANIAN: So what does it mean for Ford in terms of what do you guys get in terms of cross kind of platform technology transfer there?

JIM FARLEY: We're trying to be really smart with our motorsports money. In the past, we just raised it. We owned, like, the Jaguar team and things like that. We didn't want to do it that way.

This is a technology transfer that's very specific. We will help them with their software for the battery control and the battery chemistry. The battery tech has-- we're investing a lot in EVs. We're going to have 2 million EVs on the road in '26, so we know a lot about EV batteries.

On the other hand, we can learn a lot from them about telemetry but especially about aero. Aero is becoming the most important thing in vehicle design now. And the best aerodynamics in the world are at Red Bull. So it's a great exchange of technology.

PRAS SUBRAMANIAN: Right, aero from their side, battery tech chemistry from your side. Will that trickle down, do you think, into road cars that we'll see?

JIM FARLEY: Absolutely. Right now, already, the aero we're learning here is making its way into the second gen products. On a full-sized pickup truck, which we're number one in the US, a really high aero design can give you 75 more miles of range. So that aero, we are talking to them right now.

On the other hand, they're trying to find the right chemistry for '26. Sounds like a long way away, but for them it's right around the corner. So they're right in our Ion Park battery lab now, saying, hey, is it solid state? What is the highest energy density that I can get?

PRAS SUBRAMANIAN: So you know, it's no surprise that you would join with Red Bull, a top team right now. But is there more to this partnership? I mean, is it this shared kind of background, that old Jaguar team became Red Bull. You guys used to own that team. Is that sort of part of why you guys are in Red Bull?

JIM FARLEY: No. [LAUGHS] In fact, that kind of hurts, actually. We did it because it's a smart partnership. We didn't want to spend hundreds of millionths of a year going back to Formula One. We wanted it to be a specific tech driver.

Kind of think of it like in the '70s and '80s, it was a whole engine. Now it's a technology exchange. And that makes sense. We don't want to go back to the old days. We don't feel like that model works for us.

Maybe other OEMs, like Ferrari, it works for them. Not for us. We want Red Bull to go win. We just think we can have a lot of great-- help them win, but we can also learn a lot.

PRAS SUBRAMANIAN: You know, you mentioned that the popularity of the sport in America in particular, really big. A new race in Vegas this year. The Netflix effect on the popularity. Is that sort of why you kind of started to dip your toes into F1 again?

JIM FARLEY: You know, actually, when we started the process, we didn't know that was going to happen. But it certainly sweetened the pot for us. I think the drivers and Christian himself are such personalities now that that's the kind of spokesperson we run for our electric vehicles. It doesn't have to be someone from Hollywood.

And they know more about the product than people we would hire as a spokesperson. And it's a Super Bowl commercial every weekend. So the exposure is authentic, they really know the cars, and these drivers have such influence. And that's why we're already in Ford electrics.

PRAS SUBRAMANIAN: Right, right. And speaking of electrics, a big part of your this year, 2023 as Ford, you guys had earnings out recently. Mixed results, but I know you're positive on 2023. What are some of the key takeaways you want to give to investors as we kind of enter the new year?

JIM FARLEY: I mean, first of all, be patient with Ford. We are under a double transformation. Some things are going really fast, like we're now number two in EV. The Lightning is sold out for, like, another year. And there's some things-- and BlueCruise is now the best-rated hands-off driving system. I mean, I kind of didn't think that would happen this fast.

On the other hand, the industrial system, purchasing supply chain, our manufacturing, our engineering, we just have to get a lot of costs out. It funds the whole future of the business. Fourth quarter is a good example. We lost 100,000 units because we just couldn't get chips. We can't let that happen.

So I think investors, we're going to be a great-- and we announced the $0.80 dividend, too. So we're committed to giving cash back to the shareholders. But we're a growth company, and it's going to take a while on the industrial side. But boy, is Ford going to be a powerful company.

It turns out that a middleweight one's to be in, like, the right place to be in our industry, which we didn't think. We thought, like, the Toyotas and the Volkswagens would win. Actually, we're in the right spot.

PRAS SUBRAMANIAN: Yeah, and speaking of growth, you're growing with the sport that's getting bigger and bigger in America. And this real quick, last question here, Jim. You know, 2026, F1 partnership. You're also going to be in Lamont 2024. So a lot happening in the motorsports front. You're a racer yourself. Are Ford customers and other fans kind of excited about where Ford's going globally from a motorsports point of view?

JIM FARLEY: I mean, I hope so. We're-- redone our motorsports strategy. Mustang as a business. We're going to compete with Ferrari and 911 all the way down to grassroots, from V8 supercars and NASCAR all the way down to grassroots and, of course, WEC, IMSA. And then off road, which we didn't talk about.

But we have Raptor, and we have, you know, World Rally, and we a global Ranger. So we really feel like off road we can dominate in a way that maybe we can compete with Porsche on the road. And then Formula One, NASCAR, these are really important circuit racing for us. But Formula One is something new, and we really want to tie it to our EV technologies.

PRAS SUBRAMANIAN: So off road, on road, on the track, Ford is sort of everywhere. Jim, congratulations on the big partnership today.

JIM FARLEY: Thank you.

PRAS SUBRAMANIAN: Hope to see these cars on track soon.

JIM FARLEY: Yeah, me too. I hope you get to drive one.

PRAS SUBRAMANIAN: Oh, I would love that. I would love that.