Ford CEO Jim Farley is targeting over $1 billion in software sales next year – as software update subscribers grew 40% to 765,000+ paid users.
Ford, Tesla and Rivian, are “really the only non-Chinese OEMs controlling software across all the vehicle domain” Farley said on an earnings call.
And although the company’s shares slumped after Q2 earnings showed a spike in warranty issues, that increasingly integrated and deep software visibility will allow these to be spotted much sooner in future, he said.
“With the connected vehicle and having the digital electrical architecture and us controlling the software across all of the operating domains, we would be able to get signals off the vehicle early to tell us whether or not we're having an issue in certain components” Farley said in a Q&A.
“Then we can go out and.. reduce the number of vehicles that are impacted and actually either do an over-the-air update if we can fix it that way or do a preventative maintenance type program for folks, which will be much cheaper than a field service action recall… On the software side, we'll be able to understand when things are an issue much earlier, and we'll be able to fix them through over-the-air updates” the CEO added.
Ford sees a huge opportunity to expand its remote vehicle control capabilities for fleet customers, including to control fleet vehicle speeds.
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Spending a significant amount of time on the fiscal Q2 call on Ford’s technology work, the automotive firm’s chief executive said that “our vision is not just a powerful computer on wheels; it's actually a robot.”
As Farley put it on the call this week: “Most companies are doing OTAs [over-the-air updates] on vehicle entertainment, but Ford now has multiyear experience on updating powertrains… [delivering] longer range, better efficiency on the battery” he told analysts on July 24.
“Our vehicles are increasingly general-purpose computers capable of delivering the type of application environment, AI for our customers, and user experiences that we expect from all of our digital devices… to create powerful, connected, ever-improving customized experiences,” he added.
A look at Ford’s executive ranks shows that software focus: Doug Field, Ford’s chief digital systems officer, and Rob Bedicheck, who heads up platform architecture, were both recruited from Apple; Mike Amend, Ford’s CTO, was previously head of Dell’s global online business.
Ford, like many other car-makers, is increasingly offering customers premium software updates for things like power boosts – something Tesla, for example, charges at $2,000 and Mercedes at $60-$90/month.
The company’s CEO told analysts that Ford would be able to “expand these vehicle controls to speed control and acceleration limits in the near term. Now no third-party telematics solution can offer this functionality… We call it an uncrossable moat for our software business” Farley said.
He added that paid subscriptions for its Ford Pro Intelligence software platform “grew 35% year-over-year… with a triple-digit growth in telematics fleet management and charging depot software.”
