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June 12, 2019 05:21 AM

Former Ford CEO says industry faces EV 'reckoning'

Michael Martinez
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    MICHAEL MARTINEZ

    Mark Fields, right, on electric vehicles: "They are going to have to first restructure the margins of the business and on top of it you're going to have to incentivize demand."

    TEL AVIV, Israel — Former Ford CEO Mark Fields says the auto industry needs to tap the brakes on its expectations for electrification.

    "I think the industry is going to be under a reckoning over the next 2 to 3 years," Fields said Tuesday at the EcoMotion mobility conference here. "My view is that yes, electrification is going to grow over the years, but it's not going to grow to the extent all the experts are telling you."

    Fields, senior adviser at TPG, a global asset management firm, said automakers must grapple with high development costs and a lack of demand, despite promises from most major companies to electrify their lineups.

    "They are going to have to first restructure the margins of the business and on top of it you're going to have to incentivize demand," Fields said. "If you throw in, during that time period, a recession that's going to happen at some point, that's going to put a lot of pressure on the OEMs."

    While at Ford, Fields tried to position the automaker as a leader in electrification. Under his watch, Ford began plans for a long-range, battery-electric vehicle, although his successor, Jim Hackett, ordered a redesign of the vehicle shortly after taking over.

    Fields also led Ford to invest $4.5 billion in electrification through 2020, although those plans have since been expanded.

    He noted the U.S. is likely to lag other countries in embracing electrified vehicles.

    "China is setting the tempo and the pace for electrification around the world," Fields said. "The Chinese government has said, 'We missed being the leader in internal combustion engines. Now is our opportunity to lead in a 21st-century propulsion system.' They've crafted their industrial policy along those lines."

    Fields offered a cautious outlook on autonomous vehicles, saying he didn't expect a proliferation until the "back end of next decade." Even then, he said the vehicles would focus mainly on certain areas, such as cities, and would be used for specific purposes such as package delivery.

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        • Capgemini: All or nothing: Why circular business models require a holistic approach
        • Capgemini: Invent Head on automotive takeaways from CES 2023
        • Capgemini: Securing the industry's future through a radical rethink
        • Capgemini: Succeeding with the automated driving journey through AI
        • Capgemini: The circular economy is spurring new thinking on EV batteries
        • Capgemini: Toyota and Capgemini leaders on how OEMs can handle industry changes and succeed
        • HEXAGON: Plugging into data is the only way to make winning EVs
        • PUBLICIS SAPIENT: The power of post-purchase: How automakers can maximize customer lifetime value
        • TOYOTA EUROPE: Toyota Motor Europe's next-gen C-HR: sensory innovations revealed by Vehicle UX leader
        • TUV Rheinland: Ideas, services and certifications for smart mobility
        • TUV Rheinland: Testing of automated and autonomous vehicles on test tracks
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