Joseph White

DETROIT (Reuters). Ford Motor (NYSE.) Chief Executive Jim Farley was applauded by Wall Street for increasing production targets for their electric F-150 from 100,000 to 150,000 per annum, three times more than the initial number.

Farley is asking investors and customers of commercial vehicles to be more attentive to Ford’s software and services, along with its electric Transit vans, and the rest of the company’s portfolio.

Farley and Ford executive, John Ford, presented more details about the Ford Pro commercial vehicle strategy at an event held in Sonoma this week. They also set ambitious goals.

Farley stated to Reuters that Ford’s first step was to invest in digital software and service-based revenue.

Ford Pro was a stand-alone unit, created to exclusively serve government and commercial clients.

Ford Pro set the goal to double its annual revenue, to $45 Billion by 2025. That’s 67% higher than 2019. Farley noted that Ford Pro was paving the path for Ford’s expansion of digital services available to customers.

Farley stated that the U.S. commercial vehicle market is fragmented. Ford, as the largest commercial vehicle manufacturer in both the United States of America and Europe can help to bring the pieces together when electric commercial vehicles become more common.

“We’re the Tesla (NASDAQ 🙂 of this sector,” he stated.

Ford Pro will be the Dearborn, Michigan automaker’s headquarters for commercial vehicle operations. It uses software and employees who joined Ford when it bought charging startup Electriphi (in June 2021).

Ford Pro is also in partnership with Salesforce.com Inc, a Silicon Valley enterprise software firm (NYSE:), to help develop software for digitizing billing and paperwork for contractors. This software will also be used by other businesses who use the Ford Pro to deploy employees to positions where they also serve as offices.

Ted Cannis is Ford Pro chief executive and stated in an interview that there are 125,000 active accounts. The unit also has a 40% market share for pickup trucks and vans. Rivian Automotive Inc, established competitors like General Motors Co (NYSE) and the new BrightDrop van division are looking for large customers such FedEx Corp (NYSE) or Amazon.com Inc(NASDAQ:). These big customers will be golden tickets to service-based vehicle businesses.

Cannis stated that Ford has 125,000 “golden tickets” with its small- and medium-sized customers.

TREATING OVER EEVS

Ford attempted to increase its service business to boost its existing manufacturing businesses. This was unsuccessful in previous years. Ford bought a car repair chain and an auto salvage yard in the 2000s to increase its revenue stream over a greater portion of the vehicle’s life cycle. However, these diversifications failed.

Ford’s service strategy must be able to compete with rivals who are trying to sell trucks and vans to large commercial fleets. Companies like ChargePoint, which already provide fleet charging services, may challenge Ford Pro’s individual parts of the service business.

Rhett Ricart from Ohio, Ricart Automotive Group is an important Ford dealer. Rhett Ricart said Ford executives had done their research on Ford Pro. He said that the automaker now must provide electric vehicles to business customers.

These vehicles must be perfect. There will be trepidation. They understand what internal combustion engines can do. Ricart explained that these people know where to find gasoline.

Farley and Ford executive said that connected vehicle technology (including telematics that allows Ford to collect data from its vehicles) will provide Ford with a solid foundation for subscription services and recurring revenue. They also expect increased repair business due to software that alerts fleet owners when the vehicle needs maintenance.

Ford can determine how long vehicles have been driving and their location. This allows Ford to create hardware and software that will allow workers to recharge at a central station, at home or both.

He said, “Because of Telematics we are able to give them a very specific plan based upon how the fleets work.”