finance

Splitting off EV unit needed to happen to transition faster

Written by IhebQld

At this year’s Monterey Car Week, Lincoln (F) is celebrating a big milestone – in style.

The brand, now in its 100th year, will be a featured marque at Sunday’s Pebble Beach Concours d’Elegance and will show off its Model L100 electric concept vehicle. The electric vehicle (EV) concept is a massive vehicle with a completely configurable, luxurious interior that reimagines what it will be like to be transported in an autonomous future.

Ford CEO Jim Farley believes this is Lincoln’s future.

“The biggest change in our industry isn’t really electrification, it’s more about autonomy coming together with a software updatable vehicle,” Farley told Yahoo Finance from inside the Model L100 Concept at the Quail Event in Carmel, California. “Going to a digital powertrain is great, but the real change in our industry is going to be using your interior differently than you think… at least on the high end.”

For the interior at least, it’s something Farley calls a “digitally enabled experience,” which can be changed ad infinitum via software updates.

Lincoln’s transformation, which will see the brand go all-electric and introduce 4 new EV models by 2026, is mirroring the changes happening at Ford, where Farley has split up the business into two operating units in order to drive its EV transformation.

Lincoln Model L100 Concept Interior

For Farley, the split needed to happen in order to get things done, faster.

“I have no idea why other people wouldn’t to it,” Farley says about splitting up the ICE (internal combustion engine) business and the EV business.

“I was watching the company literally struggle; I saw a transmission engineer trying to learn about batteries, [the transformation] was just going to take too much time, we don’t have time, we’re way behind,” Farley says about the need to change the way Ford was doing business. “So to catch up and pass we need to specialize… I have no idea how we would make this transition if we didn’t specialize.”

Farley says Ford is currently insourcing many things, from electronic equipment to software — things the company used to outsource. That has led to hiring new workers from other industries to help that change, one that is easier for the company to do with two separate business units.

Farley believes the new incentives for EVs and componentry coming from the just signed Inflation Reduction Act is a “big deal.”

“It will definitely help our industry, I would say our economists would be very favorable to what just happened, but the biggest benefit isn’t the EV consumer credit, it’s the $35 per kilowatt hour (kWh) support for battery production in this country,” Farley says.

The importance of Monterey Car Week

Legedary race car driver and restorer Phil Hill

Legedary race car driver and restorer Phil Hill

As a young man, Farley worked with legendary race car driver and car restoration expert Phil Hill and Monterey. He also worked on many cars that ended up at the Pebble Beach concours competition.

“[Monterey Car Week] brings me back to, for me, my original love of our industry, and frankly how I paid for grad school, and the people I learned the most about cars from where those mechanics making eight bucks an hour,” Farley said. “I learned more about beauty, and excellence in engineering from them, than from any of our fancy engineers.”

Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.

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