A new managerial regime at Ford (NYSE:F) is signaling a new attitude in the carmaker's relationship with electric vehicle (EV) batteries. At the Reuters Automotive Summit, recently installed CEO Jim Farley revealed that the company is now considering producing its own battery cells for the increasingly popular vehicles.
"We are discussing [battery] cell manufacturing," he said bluntly in his remarks at the conference, which concluded on Friday. "I think that's natural as [EV] volume grows."
This is in stark contrast to the stance of Farley's predecessor, Jim Hackett. In July, less than three months before he stepped down from his position, Hackett stated that there was "no advantage" to Ford producing proprietary EV batteries.
That policy differentiated Ford from numerous well-known peers in the automotive sector. For example, the titan of the U.S. industry, General Motors, is devoting piles of capital and resources to such products, while Tesla Motors (NASDAQ:TSLA) famously powers its vehicles with Tesla brand batteries (although these are made in partnerships with third-party manufacturers).
Somewhat incongruously, Ford has big ambitions in the EV space. In 2018 it announced grandly that it would double its investment into such products, coming out with 16 pure EV models by 2022. In line with that strategy, the company just took the wraps off its first fully electric cargo van, the 126 mile per-full-charge E-Transit. This is the EV version of its storied Transit.
The EV revolution is upon us in a big way, and it's clear that Ford investors are cheered by Farley's new and deeper commitment to it. On Friday, Ford stock closed the day 4% higher, trouncing the gain of the S&P 500 index.