Ford has big plans for connected vehicle services, a part of its business that it expects will net the company $20 billion in annual revenue by 2030, with another $45 billion coming from the new Ford Pro commercial business by 2025. Much of that revenue will come directly from Ford Pro services and ADAS – otherwise known as advanced driver-assist technologies – such as BlueCruise and ActiveGlide, which will be available for additional hardware and software costs plus a subscription. While speaking at the recent 2022 Alliance Bernstein Strategic Decisions Conference, Ford CEO Jim Farley reiterated that he believes these services will be a massive source of revenue for the automaker moving forward.
“Well, I believe, like I said in the video, I think this is the biggest, most exciting kind of land grab of revenue in our industry since the Model T,” Farley said. “I really believe that. And the reason is because, think about it – we used to use our phones to make a call and then the embedded systems got put in place and the sensor set, and all that software allowed those devices to not be used just for calls. That’s about to happen in our industry. When I see the pricing power for ADAS, not just at Tesla, but all of us have incredible… it feels like that’s the first shippable software that we could send to a car that customers are really willing to pay a lot of money for.”
“If we can get people to fall asleep in their car, give them 45 minutes back on their commute, they can go to work 45 minutes later, they can go home 45 minutes earlier. It won’t be $5,000. It’ll be tens of thousands of dollars. And so we’re about to change the ride, just like Apple and all the smartphone companies changed the call. And I believe when that happens, when you can ship a lot of software to the car and you have great sensors, really change that experience and be a lot more productive, there will be a large revenue expansion.”
While a recent study found that new vehicle shoppers aren’t keen on paying monthly fees for certain features like heated seats and remote start, most are willing to pony up for things like performance upgrades, over-the-air software updates, and stolen vehicle tracking. Ford also sees connected vehicle services as a way to reduce marketing costs through word-of-mouth advertising, which is important as the automaker shuns more traditional methods of advertising moving forward.
We’ll have more on Ford’s connected vehicle push soon, so be sure and subscribe to Ford Authority for continuous Ford news coverage.
After charging 60K plus for a vehicle, now looking to charge extra for what should be standard features!
Hopefully other manufacturers will not go down this same road as Ford. Already researching others as Ford continues to disintegrate before our eyes under Farley!
The real money is not in buying the vehicle upfront it’s in the parts business afterwards and if he’s going to change that you still have to make money somehow.
That’s actually not true at all if you’re talking about the manufacturer and not the dealer. The parts and service business pales in comparison to the revenue and profits from new vehicle sales; it’s not even close. Auto manufactures are manufacturing companies and almost all of their revenue is generated by producing vehicles.
I work for Toyota and we make little profit on vehicles. Our biggest profit comes from financing and all manufacturers will have a subscription plan on some features.
People can’t afford food right now, but Farley thinks they are going to pony up for fluffy services that nobody really needs. UnafFORDable!
Once the sensors and radar are built in the vehicle, they require virtually no ongoing maintenence or updates. The only exeption is if a windshield is replaced or if you are in an accident, in that case it is the responsibility of the owner, not the company. If anything, it’ll increase the upfront cost of the vehicle in order to install the software.
A couple of other automakers have already tried this, and there was so much backlash, that they had to backtrack and drop their monthly costs. There is no way the general public is going to accept these addition charges, they can barely afford the loan payments of ever increasing vehicle prices, especially with interest rates going up. This guy keeps making these abserbed statements, and one day he is going to be either eating crow, or out of a job, and is doing a good job driving customers to competitors, like me.
Once a bad recession hits, they will backtrack and make all of this free. And never charge for them again. So, the investors might be fooled by Farley’s “charm” but the average consumer will think he’s an idiot (like many of us on this site).
Good Lord God Have MERCY!!!! This FOOL Is In It For “HIM” and Only “HIM”!!! He want’s his GOLDEN PARACHUTE To Match Elan Musk’s NET WORTH….. He’s a Loose Cannon. For God’s Sake, these Vehicles are Outta Control with Cost’s Now!!! $60/80/90 + K for a TRUCK???? What in the “H” gives here JIMBO. “ADAS” “such as BlueCruise and ActiveGlide, which will be available for additional hardware and software “costs plus a subscription”. This is Purely Unadulterated B.S. This Pilfering way of doing Business has only ONE Reason….. and that is to PAD JIMMY’S RETIREMENT, This FOOL can’t continue on like this. This guy reminds me of Wyatt Earp when he said, “AND HELL’S COMING WITH ME” This BIRD BRAIN is Bringing HELL to all of his Customers. He’s around 60 Years Old, He know’s what Back In The Day Refers to, He was There!!! He Know’s what it “WAS LIKE”, and the Damned FOOL is Acting like he could Give a SQUAT LESS how the rest of us feel. We Ain’t got the Wing Nut’s Money, He could care LESS…. J E R K!!!!
Why don’t you just put a credit card slot in the dash so if you want to nap or get a massage you can pay as you go. Ford’s business plan; sell them an overpriced vehicle and then charge them extra each time they use it. $10s of thousands? His greed has no limits.
does the vehicle come with a “hooker” option? I mean, as long as I am lying back in the seat…
If we can get people to fall asleep in their car, give them 45 minutes back on their commute, they can go to work 45 minutes later, they can go home 45 minutes earlier. It won’t be $5,000. It’ll be tens of thousands of dollars. And so we’re about to change the ride, just like Apple and all the smartphone companies changed the call. And I believe when that happens, when you can ship a lot of software to the car and you have great sensors, really change that experience and be a lot more productive, there will be a large revenue expansion.”
So the head idiot at FORD now wants people to be able to fall asleep at the wheel and have the vehicle “deliver” the refreshed “driver” to his or her destination?
After the first accident, there will be a gold rush of lawsuits coming!
I just bought a new vehicle and turned off all the driver nanny crap!
… it’s getting to the point where the last bit of fun driving,
will be touring around Sun City in a golf cart.
Scott, I live in The Villages, Florida and I much prefer driving my golf cart to my cars. 90% of where I need to go is golf cart accessible.
Here is a suggestion, Buy it once, pay for it once….. and bake in the promise to provide free tech upgrades to your vehicle if your original purchase supports the new features. Aside from establishing customer loyalty, I suspect resale values would be much better creating a strong secondary market of used product in addition to lease returns stream. Farley has a lot of good ideas, I only wish he would distinguish himself in the industry rather than following along what others will also do. AS for cash cows, remember when the admin fee was $50 and now reaches into 6,7, and 8 hundred dollars. Leasing anything on top of your ownership experience is not a way forward….
Ford CEO is a complete idiot. I’m a Ford owner, but this fool is gonna drive the company into the ground. He’s lost his mind!!!
HE IS PERSONALLY DRIVING FORD OUT OF BUSINESS !!!!! ON FARLEY’S FIRST DAY OF RUNNING FORD; HENRY FORD THE FIRST GAVE HIM THE FINGER FOR F^*^*^^*ing UP HIS COMPANY !!!!!!
Ford is making investments in areas customers hate.
The “goods as services” model really only pisses off consumers, and leads to low customer satisfaction. That’s bad in something like a vehicle that can be traded away easily.
Ford should look at XM for reference. They tried to offer a premium version of a free service and nearly went bankrupt countless times. Now it’s free pretty much constantly, with deals to have it for like 3 bucks a month the norm. It’s constantly hated on because it’s made unsubscribing a huge pain. If it weren’t for the oems, they’d be long out of business and one of the cell companies would have acquired their scraps for their spectrum. That still might happen.
Ford needs to get the idea that consumers will pay to use their own vehicles. Frankly, I could see this becoming a legal battle that Ford would likely lose, as they’d be locking out features that were purchased with the vehicle. It’s like if you bought a used house but then the builder required a monthly fee to use the fridge and other appliances. Not gonna go over well.
Hey Farley, you are out of your mind if you think the public is going to ‘subscribe’ to additional features after buying the vehicle. And this goes for any other vehicle manufacturer too.