The transcript from this week’s, MiB: Darren Palmer, Chief of Battery EVs at Ford, is below.

You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here.

~~~

BARRY RITHOLTZ, HOST, MASTERS IN BUSINESS: This week on the podcast, I say it every week but it’s true, I have an extra special guest. His name is Darren Palmer, he is the head of electric vehicle development at Ford where he helped to introduce such vehicles as the Mustang Mach E, the F1 50 Lightning, the E Transit Van, they are working on everything from an electric Explorer, if you would like to get your hands on an electrified Bronco, well you better listen to this because this is absolutely a fascinating conversation not just about cars but about technology and software and consumer relations and design.

And really I don’t think this scenario we didn’t touch on. I found it utterly, utterly intriguing and I think you will also. So with no further ado, this is Ford’s director of electric vehicle development, Darren Palmer.

ANNOUNCER: This is Masters in Business with Barry Ritholtz on Bloomberg Radio.
RITHOLTZ: My extra special guest this week is Darren Palmer, he is the general manager battery electric vehicles at Ford, he is overseeing Ford’s $30 billion shift to electrification. He helped launch the Mustang Mach E, the E Transit and the F150 Lightning. he holds an MBA from Henley Management College in the UK as well as an electrical electronics and technology degree from Birmingham University.

Darren Palmer, welcome to Bloomberg.

DARREN PALMER; VICE PRESIDENT, ELECTRIC VEHICLE PROGRAMS; FORD MOTOR COMPANY: Thank you. It’s a pleasure to be here.

RITHOLTZ: So let’s start with your background, you get an engineering degree in the 1990s, was the plan always to go into automobile manufacturing or were you focused on a different sector?

PALMER: Well, it sounds so long ago now when you say the 90s. Yes, so my plan was always to go into engineering, I think a lot of people in engineering know that they are destined for that. I really like mechatronics at the time. So the fusion of electronics and electrical with creating movement as well. So I knew I wanted to go into something of complex engineering and I think somebody once said to me you know, planes take too long, trains don’t have as much interest but cars are constantly changing over and they’re a huge purchase in people’s lives.

So that’s what made me look towards cars and I look to a number of car companies but I think I always know I wanted to go into auto, and I got a few offers, but Ford, the company had a great reputation and furthermore, makes cars for everybody and I was interested in making cars for everybody not just a privileged few.

RITHOLTZ: Really interesting. And you have a reputation as a petrol head, you’re a Mustang guy, what led you to gravitate toward EVs over these years?

PALMER: Well, I’ve been very lucky in this career, 29 years in Ford, and every time the last challenge finished they offered me another challenge, so I ended up working all over the world on every type of cars, vans, commercials, every class, B, C, CD class cars, so increasingly larger and in luxury, and every — all around the world, India, China, South America, U.S., and Australia, so at one point, I had plants on four continents — five continents, and development center on four continents, so all of those different parts of experience led me to I was starting to work on hybrids.

And the company said we want to do something different, we need to have a completely new approach to electric cars because we were trying them are getting know where they decided to do something called Team Edison, and they asked, with my background in international and really open-mindedness was the key there, we formed a team called Team Edison to determine the future of electric cars for Ford.

So that was about four years ago and that was four and a half and that was my move into electric cars.

RITHOLTZ: Tell us about Team Edison, obviously a little bit of a reference to a famous American entrepreneur, what is Team Edison at Ford?

PALMER: So what was happening was we were trying to develop electric cars, but they would be measured by the same measures as gas cars, so they wouldn’t meet the hurdles, the investment hurdles, the profit hurdles, the volume projections, so we were getting nowhere and we in fact, we were going to make Ford Focus BEV version 2, and we knew it was becoming increasingly aware that that really isn’t what the market wanted.

So we had to change something and we knew it was a cultural change, so we decided, we either buy an electric car company but then you have to transfer tens of thousands of people in one day or we try something different, we tried — we create a startup within Ford Motor Company and that’s what we decided to do.

So a gent called Ted Cannis, really one of our top business leaders was put in as the head of that group and he set about recruiting people internal and external to head up Team Edison.

I was the first one in and when he told me the proposal he convinced me to come in and that’s where the journey started, and we had some external people but not huge amount because it’s all about, first, you got to work out what to do and then you got to make it happen, you know, 100-year-old company and I can tell you …

RITHOLTZ: (LAUGHTER).

PALMER: Making it happen was harder than determining what to do. So we formed and we moved ourselves outside of the main buildings and we formed a different culture, really building up from the ground, we had about 70 to 80 people handpicked each one and we were inspired by startups in California. So we spent time there early on to determine how they work, which is very different and we setup a culture extremely similar to that.

We also went to China, to Norway where electric cars were prevalent to see what others are doing and then we set about determining where to go, at the time it was an $11 billion investment in electric cars.

RITHOLTZ: Wow.

PALMER: It is now today announced a few days ago to 50 billion now by 2022.

RITHOLTZ: Wow, I have 30 billion down my notes but 50 is a lot of money. The Team Edison, the first project was that the Mustang was it later was Team Edison after the Mustang Mach E?

PALMER: The first thing to do was to determine where to play and how to win, and that meant we had to first understand, I mean for the whole portfolio, was at the time was $11 billion, so three or four cars coming through.

And the battery infrastructure and the charge infrastructure, and all those things you had to do, so it was actually to work out where to play and how to win and we quickly worked out, we went to California and I was talking to customers in California and quizzing them about their cars, and we determined quite quickly that they had transitioned to BEV and they would never come back, they were also delighted with their products. And it felt like they moved from a flip phone to a smart phone like an iPhone or similar.

And at any price, they would never move back which is very similar to the phone analogy and I asked one of them I offered them “Hey you know we need your car for testing so I will give you a free BMW M3 and two thirds of your money back” and he said, “I’m not interested.”

RITHOLTZ: Really?

PALMER: Well, I’m authorized to offer you 100 percent of your money back and free BMW M3. He said “Not interested” and I said how can that be? And he said “Well, because I discovered the future, I can afford it and I deserve it.”

And we realized at that point, these people, they are never going to buy the traditional vehicles that we had, they are buying a technology product and we brought that realization back and said we need to completely change our plan.

And that led us to leading with our icons so we made a plan which vehicles to attack in which order and we made the strategic choice, every BEV vehicle from Ford will do things that gas never did enabled by the technology, so none of them will be a car just with an electric motor in it, that’s not what customers want.

And so that’s what we did and the first thing we did in Team Edison which was $11 billion and made the first three cars, the Mustang Mach E, which you may have seen one recommended — the only electric car recommended in America, and now, last week and then E-Transit is now just launching, we are nearly sold out already …

RITHOLTZ: Wow.

PALMER: And it is likely to be a leader in its field, it’s already nearly 50% global in its field now with the gas vehicle, and then the F150 Lightning which is of course the big one for us, where we got over 220,000 orders now, we had to switch the system off.

ANNOUNCER: You’re working hard to build and protect wealth, and today’s markets are challenging. Diversification is always important and in times of increasing volatility, alternative investments can provide both balance and potential upside.

Did you know professional venture capital investing traditionally only opened to the ultra-wealthy is now accessible to millions of accredited investors like you. Get to know Alumni Ventures. Since 2015, Alumni Ventures has made investing in highly competitive venture backed private companies simple and accessible. We built a unique venture firm to serve individuals not institutions.

This is not Angel investing or equity crowdfunding. With Alumni Ventures, you are investing in true VC backed startups alongside the who’s who of VC firms.

Alumni Ventures is ranked by Pitchbook as one of the most active venture firms in the U.S. and we are ready to build your venture capital portfolio today with a simple investment process and accessible fund minimums, it’s easier than ever to get started in venture.

Check out Alumni Ventures at VentureInvesting.info, that’s VentureInvesting.info.

RITHOLTZ: So let’s talk about those three big cars that you oversaw the launch on starting with the Mustang Mach E which won a number of awards, I had a loaner of those cars last year and thought was really interesting and very well-made EV.

Tell us about the challenges you ran into when you were first thinking about putting that car out, it really was a substantial break from what Ford had done in the past.

PALMER: Yes, so we had originally planned Focus BEV Part 2, but we quickly realized due to human centric work we were doing and human centric work puts you out with customers very early, and you just talk with them about how they feel about things that you know, you are not asking them exactly what they want, you are just talking to them about their lives and what they see, we discovered pretty quickly what they were looking for in this next generation was a technology product first.

And you know, there’s one company out there which is really doing that which is Tesla and they’ve been a leader in that space and we noticed how customers of those vehicles were — they really liked the experience they got and we said we – in that vehicle we’re going to make, it needs to be a technology-first vehicle, but we want to bring what is our spin on that, what is Ford, what does Ford bring to the table? Tesla has their attributes so Ford needs to have their own and we said to ourselves what brands do we have that could be worthy of what we’re going to make an it could be synergistic.

So the one that came to mind pretty quickly was Mustang and the first time we said that, it sounded crazy as some people were very shocked by that, so we asked ourselves what if it was a Mustang? And then we started with the exterior design actually and we went downstairs to the design team who are working on a Focus BEV part two and I could tell you they weren’t the most fired up. And then we said what if and again they started to come to the table and we said what if we mixed, there is going to be an SUV because that segment growth, the greatest segment growth and where customers are going especially millennial, so we wanted to be there, we knew that.

So therefore, we are talking about an SUV Mustang what might it look like, and in that first day, they started sketching we put together some of the Mustang cues with that SUV and then we started to like what we saw and then the designers got lost in it and then said okay, leave us, we left them and then we said we are going to make a clay of that vehicle.

And so we went away for the weekend we came back early 6, 5 or 6 am on a Monday morning and said don’t look at it, we walked away and they were put in dyno conduit, which is the kind of silver foiled simulator vehicle and when we all turned around and we saw that first execution, we said “oh my word, that can work. That could work.” That was from the first weekend.

RITHOLTZ: That’s amazing.

PALMER: And we said my word, that could work.

And by the way the designers had gone from not the most excited to off the wall excited, didn’t have time talk to us, just busy creating, they immediately took the dyno cost again and started carrying on with the clay and they were off.

So we went to the next department, and we went to interior and we said, well, what have we got? They showed us and we said, you know, it doesn’t really look, that’s not a Mustang, that’s not worthy of that and we said, how would you change it if it was a Mustang, the same thing happened, they start to get excited.

RITHOLTZ: (LAUGHTER)

PALMER: By the way, both of them, the exterior designers and the interior were both the people who did Mustang, so you didn’t need to explain to them what a Mustang was, it was the same people and they start to bring a lot of those cues in. So they kicked off, there was the same excitement, we went to the next department and we said we need technology and that was a problem, we went and said well, what have we got that would be a high-tech tech forward solution that is over the air updatable and will work for years to come and upgraded and I’m afraid we didn’t have anything. Our system at the time was just not going to do the job.

So that was the biggest challenge for us and we went downstairs to the development team and we said in Team Edison, we work without grade structure, all together on the problems and anybody can speak out without fear of anything, reprisal or anything.

So we encourage people to speak up so we pooled together and we went downstairs to the main team and worked — asked the programmers who were working on graveyard (ph) to come into the room and shut the door we explained how we work and you want to speak up and I said to them hey guys we needed next gen operating system that is world class and this car is launching in two and a half years, how might we do that?

And they go silent for a while, people take time before they are comfortable and one of them said not working the way we work. And I said interesting, how would you do that then?

RITHOLTZ: (LAUGHTER)

PALMER: He said you’d have to work like a software company.

And we said, like what? Well, they work in one room with the designers, the human machine interface and the programmers in one team together with the equipment they need, the facilities they need and the funding they need without frankly management interference. And I said what if we do that? And they said we’re never going to do that here.

I said well, what if we said we’d give you everything you want? Could you do that? They said, well, if you could do it, then yes, we would. And I said, well, would you start Monday if we could do that?

RITHOLTZ: (LAUGHTER)

PALMER: They said yes.

And then I said, and I’d never forget this, it made me laugh, I said, hold on a minute, hold on a minute, how do I know that you actually know how to do that?

And he said, John, and so he looks over to me with judgment, he puts down his Dell laptop and he pulls out an Alienware from his side bag and as he is opening it, (inaudible) he’s just come back from a gaming convention in South Korea, and I’m like, oh okay, he then shows me some of the things they worked on and they have and it looked like something out Marvel and okay, I got it, you guys know so we then went upstairs and went to our leadership team and we said we really, we’re into big trouble, we need this system in two and a half years and the team couldn’t come to it the way they work. And they said, well, have you got a proposal? We said yes. And we have to work a different way and we need maybe $7 million of immediate funding to just fund everything they need.

So he said okay, just do it, do it now. Okay.

So went upstairs to the VP of engineering and we said the same thing, he said start now. Get on with it.

So we went back down to the team that evening and said we’re ready to go. Please start. And Monday morning, they started and what I’ve learned from many of the startups, the way to work nimble is that leaders serve the employees …

RITHOLTZ: Yes.

PALMER: Who are creating for the customer. My job is to clear the path in front of them so I went every morning, what do you need today? We need better computers. Do you know where to get the? Yes. Go and buy them now. What else do you need? We need some screens to emulate the screens we are building for. Good. Go and buy them. Do you know how to get them? Yes. Then buy them in Best Buy. Go and buy them now. And they were delighted to have that ability.

And then the next day, I ask what do you need? Hey, we need a server computer to serve some of the interfaces, okay, you can give it to them.

And then on the third day, I said, what do you need. They say, oh, free flowing [ph] coffee kind of joking, okay, you get free flowing [ph] coffee. What else do you need? The answer is what do you need? You get it.

And they’ve never worked like that in Ford and then the fourth day, what do you need? Nothing, Just leave us alone. Okay.

RITHOLTZ: (LAUGHTER)

PALMER: Fifth day, what do you need? Something else and so on. We just kept doing that.

And then we created no presentations when they want to demonstrate something, they just showed it to us and the progress was I’ve never seen anything like it in my career, within two weeks they had running prototypes that were touchable interfaces that they had created. One of them created the main interface you know while he was working off-site at home and he decided to create it in HTML 5 the Internet my main language for websites because that was convenient to create and he had a complete working interface in two weeks.

And because it was HTML5, we could reconfigure like a webpage does which most cars do not do. And then within three weeks, they were testing it with customers in Chicago and streaming it live while the whole team watched the customers.

RITHOLTZ: Wow.

PALMER: And at one point, the customer got caught up on some of the interface and the guy said hey, can we fix that? And he corrected the code live, redeployed and because it was live said from a server, it updated the interface in the hands of the customer who then was knocked cold on it and we could carry on with the work. I’ve never seen anything like it, they did three rounds of that testing live watching customers in Europe, in China and in US and in 12 weeks created an all new interface which is getting extremely good reports now from Consumer Reports and JD Power, one of the best car interfaces in the world.

So it was incredible, I’ve never seen anything like it in my career and I learned a lot through that process.

RITHOLTZ: And last year, despite the pandemic and despite the supply issues, I think you guys sold something like 27,000 Mustangs, is that right in the U.S.?

PALMER: Yes, a bit more and were nearly 50,000 globally from the same plant and we completely sold out and we were trying to meet that demand, what we’ve — were actually we’ve agreed and we have funded and we are going to increase production to over 200,000.

RITHOLTZ: Wow that’s a huge number.

PALMER: I mean that is coming in…

RITHOLTZ: So the Mach E is very much a crossover, are there any plans to electrify the traditional Mustang pony car? The two door sports car?

PALMER: So I get asked that one a lot. So the next cars along after we’ve done the lightning is the three row car, so the size of an Explorer, that type because that’s the one along, we’ve already announced that one. And then we have a lot of calls for other cars as you can imagine, this huge calls for an electric Bronco.

RITHOLTZ: Got to be.

PALMER: And others which we haven’t announced yet, we got our $50 billion roadmap of many cars including Lincoln and the Mustang Sports Coupe, that needs not a very low battery to make that to what we wanted to be and we have quite high aspirations for what we would want that to be.

And so we are only going to do that when the technology will allow. We know customers really want, they want over 300 miles, that makes them comfortable and happy and that’s always been a product that has punched above its weight and gives performance of normally much more expensive cars, and with the whole imagery of Mustang.

And so we are not doing it yet, we have nothing to declare on the timing of that yet, we are going to do it but we will only do it when the technology allows us to make it incredible.

RITHOLTZ: You know, the Mach E has by all measures been a wild success. If there’s any fly in the ointment and this kind of surprised me, it was all the pushback on the Mach E over the Mustang name, well you’re a Mustang guy, what was your reaction to the sort of you know old-school enthusiasts who were offended by a crossover with using the name Mustang?

PALMER: Well I understand, I very much understand it, I’m extremely active on listening on social media, something we learned along the way, startups do it all the time. And from the first weekend we launched, we were watching social media live and somebody here for example had a problem on the first Saturday and we asked permission to speak to them and we contact them which they loved and we fixed it.

So I’m extremely aware of negative feedback from current owners. So what I set off about doing a year ago was talking to lots of them and we actually brought in the presidents of both Mustang clubs and amazing guys and we brought them actually to the launch in California and they – we brought them along and they came to see me and said Darren, you know, I understand what you are doing but can’t really endorse it and you know, I just want to let you know, I do appreciate what you are doing here.

So that was at the beginning, at the end of the two days, one of them bought two, and one of them bought one.

RITHOLTZ: (LAUGHTER). That’s so interesting.

PALMER: And they said wow, and they said, so listen, so this vehicle supports the other Mustang, we couldn’t be selling the V8 Mustang very much longer …

RITHOLTZ: Sure. Right.

PALMER: Without the support of these EV so it protects the current Mustang. By the way we still sell the car Mustang so it’s a companion, it is growing the brand in a new space and I can’t tell you the joy of the customers, you know, literally 91% of them recommend it to friends and families and everyone will listen to them.

So that’s the highest satisfaction car I’m ever aware of that we’ve had.

RITHOLTZ: Well I will tell you.

PALMER: And we’ve got some nice cars people love.

RITHOLTZ: I will tell you personally having sat in you know everything that’s out there and having had the Mach E the sort of middle not the GT, the middle of the of the road version for a week, I came away very impressed with the build quality the fit and finish, it just felt like a substantial vehicle that was well-made and was, I don’t want to say luxurious but it kind of reminded me of a Volvo where everything is very well put together, very well thought out, there is a degree of minimalism in it that was very effective and it very much had its own personality. I came away really impressed with that and want to try a GT out and see what the higher horsepower is like.

But, you know, the Mustang everybody knows a lot about, the sexy new hotness is the 150 Lightning. The Ford F150 has been the best-selling vehicle in America for, I don’t know, 40 years running, some crazy number, you must have very, very high hopes and expectations for the Lightning. Tell us a little bit about the development of that vehicle.

PALMER: Yes, the Mach E was like a practice compared to the Lightning. So I’m — we are very aware of Lightning, F150 status as America’s number one vehicle for over four decades and the love for that product is indescribable.

I know that because I have seen the customers talking.

So when we started that project, we knew what was ahead of us and everyone was warning us you better make sure that vehicle is worthy. So what people expected is Built Ford Tough and of course, it’s been punished, every piece is the same as the gas, it will pass all of the things the gas does, of course it does and then we put it down Silver Creek which is hideous to be honest, we have robots drive them now because it is too brutal for humans in an accelerated test, that’s how brutal they are now, and all the F150s do, but so does the Lightning, we made a battery case system that is impervious and can go underwater in gear, we know it has to be tough and reliable and that’s a given.

But what people didn’t expect is that mantra that we put forward, every electric card from Ford has to do things that gas could never do because that’s what attracts people in. We are aware, you know, we believe this could be the vehicle that attracts mainstream America into BEVs. Because I can tell you 30 seconds in the driver seat will convert the most hardened V8 enthusiast into a wow because it feels like a magic carpet when you drive off because it’s an isolated subtrain, no vibrations at all, near silence you’re waiting for the noise to come, and then you look at the speedometer and you’re at 60 miles an hour and there is no noise, it’s quieter than a Navigator compared to, its amazing and because there is one gear and the accelerator pedal reacts in a fraction of a second, it is unbelievable even the most hardened electric enthusiast and I had some really amazing journalists in there, they are ready to be amazed and they come away and say, oh my god, I was ready and I’m still amazed.

Because it thumps you in the back like it had 775 foot-pound of torque in a fraction of a second with one gear, you can’t really describe that and you think and you are ready for it, you say yeah, I’m ready, but it surprises you and you just want more.

And so, the great thing about it is that you can show customers in a few seconds, and you’ve converted them, that’s all it takes, you don’t need to describe any more, and that’s going to do a lot for electric vehicles.

And so, because we have a huge dealer network, I’m able to put one, I’ve decided to put one in every dealer in America that’s an EV data which is pretty much all of them so that people can go down there and try it.

And the dealers are going to call their customers and those who say hey, electric is not for me, they could say good, good come along, here’s the keys.

RITHOLTZ: (LAUGHTER).

PALMER: And see what you say after you’ve driven it and tried it out on the most hardened people I can find and they all — opens their eyes hugely. I did the same with Mustang by the way, I found the most v8, petrol in the veins, gas in the veins enthusiasts I could find and I gave them a Mach E and said try that, and they went away and I am not interested, I’m not interested in these things, you know, I’m always going to love gas, all my life I do racing, I hear you, I hear you.

I give them a Mach E GT performance edition and they come back three hours later with their mouth open and oh my god, one guy came back and said to me, oh my god, the new definition of performances is silence.

(LAUGHTER)

RITHOLTZ: (LAUGHTER).

PALMER: I might have to write that down. And then he texted me later, he got on to his, you know, older coupe, and he said, I feel like I stepped back 10 years. So that was the most hardened guy I could find. And I said to him, hey, you know you think you’re a petrol head, and actually you are not, you’re a performance enthusiast and it just so happens that the new performance benchmarking is now electric.

RITHOLTZ: Yet….

PALMER: And he said oh my god, that’s it. And so that’s how we knew it would work and because real people who are passionate about that loved it when they experienced it and so that was a — there is a barrier on the Mach E Mustang because that preconception, but on the F150, there is no barrier, people are like, well, maybe I will try it, they tried ECOBOOST once and we changed their mind about ECOBOOST.

And so they throw that to me and say, well, I’m willing to give it a go now and I put them in there and 30 seconds, they are like, I got to have it. So I’m really excited about that.

RITHOLTZ: And for people who want to see that torture test, just go to YouTube and search for Silver eak of response we change their mind about become bruised and so they closed at 2 million so I’m willing to give it a go now and I put them in their 30 seconds and so I’m really excited about the people who want to see that torture test just go to YouTube and search for Silver Creek Ford torture test and you’ll see what they do to these poor trucks, it’s quite astonishing to see the videos.

All right, so we have the Mustang out, we have the F150 out, although I think a lot of people are still waiting, you guys are pretty much sold out of the next 100,000 or some crazy number, where are you with the current presales and sales?

PALMER: Yes, so it surprised us, so we knew that one day, people will want over 100,000 of these, we did not expect that in 2022, literally 220,000 people want one, we totally, undercalled it, so did the whole industry to be honest.

RITHOLTZ: Right.

PALMER: So now we realize, you know, they are ready now and because the point of the truck was the performance and power, yes, but that’s not even what people talked about, what they talked about is this mega power front because it changes it into a new type of vehicle. You’ve now got luggage space which is basically the size of most medium-size SUV.

RITHOLTZ: Right, right.

PALMER: Extra 400 liters, and it’s electronic, it lifts and closes so you can use it to put your groceries in or anything you want people want to put golf clubs in there, two sets and other things, so it changes the product, people are very excited about frontgating as well I noticed, and then this backup power system where it uses bidirectional power and it will back up your home like a whole house generator for three days or up to 10 days.

This is what people are talking about. And then we decided to put in a price that is basically equivalent to gas including the incentive, so 39,974, no one expected that either, people expected 20,000 more and that means the barriers of price have gone. So it is just about adoption and are you ready and that led to 220,000 orders before we switched if off.

So we started off the lower run rate and this year we just we’re opening the ordering in batches because we want fairness, I mean people are really, really excited about it and we want fairness so it will be mainly from the date when a person ordered — registered and it’s a reservation they have at the moment, not an order, and then we open up the ability for those customers to order and then they make specify the vehicle in order and we give them a date about approximate date which is really important to them, and once they’ve ordered, they got a date and as long as our launch goes well, we will be honoring those dates.

And so and we’ve opened up the 22 model year and we sold them out now and so those customers all have dates and we will be opening up the next set and in August, around August, and then the next set of customs will be able to order and that’s a bigger batch.

And then the really big news is we have put in a capacity increase a massive capacity cost increase which you hit around July next year and were going up to hundred and 60,000 units a year run rate. So when that wave his which would be from July next year, we will be able to satisfy demand in a much bigger way. And so we will keep opening these waves of orders, keeping it fair, and letting customers — keeping them informed about when they are going to get it and we will keep doing that until we fulfill all the orders but it will be a big, big set up when we star ordering for the next July builds that will be a much larger and (inaudible).

BOBBI BROWN: Hey, everyone, It’s Bobbi Brown, you might know me as the makeup artist, beauty expert, you might also know me as the founder of Jones Road Beauty, but today, I’m here with a brand-new podcast, The Important Things. On this new podcast, I’ll be joined by my cohost and dear friend international bestselling author, attorney and TedTalk alum, Anjali Kumar, together we went to answer the question how can you lead a life of fulfillment?

ANJELI KUMAR: The ongoing pandemic has given us all the opportunity to examine what really matters most to us and what brings us true contentment. Each week through candid conversations with friends, thoughts leaders, creators and entrepreneurs. Bobbi and I are looking for ways we can all learn to live more authentic, gratifying lines. You can look forward to learning from our amazing guests including the incomparable Gloria Steinem, entrepreneur and designer, Jennifer Fisher, Senator Cory Booker, charity founder Christy Turlington Burns and many, many more. So join us every other week as we dig deep into the stuff that really matters on The Important Things.

Listen to The Important Things on the IHeartRadio App, Apple podcast or where you get your podcast.

RITHOLTZ: So last current EV I have to ask is the E Transit which is your large-size commercial van which I think most car enthusiasts overlook, that’s a workhorse you guys have sold a bajillion of those, what was the thinking in terms of creating the E-Transit van and what are your expectations for sales there?

PALMER: Yes, so I am just as excited about that because of how I see changing people’s lives. So we created Ford Pro under Ted Cannis, my great colleague who now runs as CEO of Ford Pro and that is to focus on our fleet customers. And the thinking behind that Ford is somewhat half of commercial vehicles in the best-selling commercial vehicles in the world both in U.S. and most of the rest of the world, so we needed to lead, and we saw an opportunity to create a Transit van using the components from the Mach E.

And that meant we could get really good scale and if one of them didn’t sell, we could flex between them quite well. In the end, this is not a problem, our problem is not enough of either of them so that is good, and that — it uses a similar battery to the Mach E, a high-tech pouch cells and it uses a motor system which is evolved from the Mach E and integrate ISC controllers from the Mach E, which means great price, great scale and it means you can offer a van and this is what I’m so proud of, the price of the product is what I’m just as proud of because it means they can get into everybody’s hand, that’s what’s important to us.

So the Transit in a lot of businesses would actually start paying back from the first day, you are not talking about paying five years and three years, I’m talking about the first day and then running costs something like half and the time off the road for servicing and so on is much, much less, so they have gone down really well, and in those businesses, you must match the mileage to the available very carefully, you do not carry extra battery …

RITHOLTZ: Right.

PALMER: That is inefficient, you are just carrying it around for nothing and many of there’s roots are very known and so a certain amount of the market that product is ready to serve, not the whole market yet but a large, large proportion.

So we expected that to go well and again has gone much better than expected, we are having to triple volume for that vehicle as well and we’re working on it now and but what I hadn’t expected is all the new use cases, so every day, we are seeing new use cases, the obvious ones, I mean we serve the whole market, you know delivery….

RITHOLTZ: Sure.

PALMER: Which is one that people is very visible, this is only 10% of our sales, it’s only 10% of the market, this much bigger market is every other use you can think of for a van. And so that’s what we serve with Transit.

But – and I’ll give you a new use case, so we were launching Ford Pro in Sonoma a couple weeks ago and them we decided to do that — decided to do it with a wine growing region so we did it with Francis Coppola, and his estate and he showed us he — they have an innovation where they are to grow better wine, make better wine, they, at the moment, when they take the wine parcels they put them in — they have to mix three parcels together in one vat, because they don’t have enough vats and nearly all winegrowers do that.

The trouble is you don’t know which is the good parcel until a year later so you have to mix them together now you mixed two good and one bad, and you don’t know and the wine is mediocre, so his innovation that he came up with his team is to build a vat for every parcel, now you have one parcel per vat, trouble is you are not allowed to build aboveground because beautiful region so he dug into a hillside and built it underground.

So he showed us the new facility, it’s amazing, it looks like a James Bond villain lair.

RITHOLTZ: (LAUGHTER)

PALMER: And then – there are only two vehicles under there, one is a diesel van, who wants a diesel van underground? The Stage 4 is safe, so you can do that, you just don’t want to, or an electric van.

So he converted an entire fleet to electric immediately and then never looked back and so we announced this, we launched this with him a while back and hen of course this, I can’t remember the number, somewhat insane number like 30,000 wine growing companies in U.S., something that, don’t quote me, but that basically they all start contacting him and what are you doing? Oh yes and making one vat per parcel, so my wine is just going to be top quality next year.

Well they took notice of that and then the next group and the next group and next group said, hey, why don’t we do the same and they said what kind of vehicles do you need? And of course, he said, Electric Transit.

So we now have orders coming in all over the place for Electric Transit for wine growing.

RITHOLTZ: And that’s just one use case.

PALMER: That’s just one use case and we hadn’t even thought — I mean anytime you need to bring a vehicle indoors, you can bring it indoors and they have power, Pro power on board which means you bring them indoors and plug power tools in the back.

RITHOLTZ: Right.

PALMER: And they have enough power to run proper power tools.

So, you imagine building factories, building homes, you just pull up the transit and start cutting more of that fruit from the back of the transit. No generators, no noise, completely independent. So that’s the use cases we — we expected to see. We’re seeing huge ones.

And the one that I love mostly and got me really excited briefly was on the F150. That one has 9.6 kilowatts of power. That’s a whole home.

And there’s a — I saw a startup where instead of getting takeaway food, imagine you have two couples over for dinner. Instead of getting takeaway food, this business, you — you book them online, they come to your driveway, open up the kitchen in the back and cook your dinner of your choice of that type, and they — and they feed it to you, you know, you know, give you the just cooked food on your driveway. They’re going to use electric F150s because the electric power is enough to power all the cooking equipment, induction hob, so on. How cool is that?

RITHOLTZ: Really …

PALMER: I — I can just imagine that scaling all over America, can’t you?

RITHOLTZ: Really, really interesting. So, let’s talk a little bit about batteries. You became General Manager of battery EVs in — in 2021. Tell us about the thinking behind that new job and where it’s going.

PALMER: Yeah. So that job, I — I used to be the Product Development Director for Team Edison, so my role was in the design and development of the new cars, leading the teams. Obviously, a large team is involved in that.

But in 20 — later on, they decided they would like me to take the vehicles to market. There are so many elements there. There’s the charge network and there’s buying online and how — they have customers who want to be treated differently, so I became general manager, which means it was everything to do with looking after the customer and bringing those vehicles that we’ve designed to market.

So that mean I talk with customers the whole time. I watch social media all the time, and I’m still very linked to the development teams to just make sure that we’re learning quickly and we’re evolving those vehicles. That — that’s really what the job is about. Fantastic job, by the way, I’m really enjoying it.

RITHOLTZ: So, let’s talk about the announcement that was made fairly recently. Ford’s leadership decided it was time to go all in on EVs, and there, I guess, splitting into two companies. Am I — am I getting that right? Tell us about the new structure that’s coming.

PALMER: Yeah. So, Team Edison led the first round, which delivered at least these first three products that you’re seeing. The market reacted really well to that. And then it was seen as now is the time to organize ourselves to really compete with the best out there for the next set of products because it’s really a transformation.

And it was determined Jim Farley led the team to say, “Hey, I don’t want people waking up in the morning and having to think about how to grow gas and how to go to BEVs because they’re so different. The — the BEV is just a normal gas/coal, it’s an electric motoring system, it’s a completely new technology product. So, he wanted to organize the teams so they — they only are thinking about one of those. So that’s how the team have organized.

One is called Ford Blue. One is called Model e. That’s the electric one obviously. And there’s also Ford Pro, and Ford Pro is all about the commercial customers and their — their sales and support. They don’t do the development. That will be done in the base — in Blue or in Model e. And — and it’s an internal company organization, I would call it.

And so, the Model e team will be focused on everything about EVs every aspect from the selection of motors, and controllers, and electronics for efficiency, to the design and development of the vehicles, to the network, charging, this bidirectional power system that we’ve gotten how that will work with customers, and improving the current vehicles because all of our electric vehicles are over-the-air updatable.

And when we say we plan on delivering lots of updates for customers, we really mean that. And we have a huge cycled plan of updates and improvements to those vehicles to roll out, and so that will also be under Model e. And so, it’s just to allow the team to really focus. We also will be setting up the same culture within that team as we did in — in TMedicine (ph), which is very flat structure, leadership supporting our employees to make changes for the customer, very efficient approval, and a very — can do an inclusive mindset that — that brings in people from all walks of life and ethnicities to bear on the (inaudible) we’re doing. So exactly like TMedicine (ph), to be honest, just on steroids. So that’s the plan.

And as part of that, I — I’m taking a new role. I go back now to product development, and I’ll be V.P. of Product — Global Product Development for Electric Cars now under Doug Field. I can’t — and I can’t wait to start.

RITHOLTZ: So, we’ll talk more about some upcoming cars a little later. Let’s stay with the concept of the infrastructure for EVs, and that’s both battery and charging stations. How — how long do we think it’s going to take before charging stations are as ubiquitous as gas stations? And I should preface that by saying Ford is part of a — a — a group that all have interoperable technology, and there is about, I think, 13,000 charging stations in that consortium. Is that about right?

PALMER: Yeah, so there’s — so we — we have reformed the Blue Oval Charging Network, and we considered how will we support the growth of the network where it has to be huge investment and — across the whole of the country and also global actually, and how might we support that. So, one way we could build our own networks, you know, we have resources we could do that. But then we have to be a Ford network and test the network and the GM network. And that’s — that’s not good for customers. We just want the charging network to be everywhere.

So instead, we chose to put together every best network in America, every one of them. And we put them together under one system. It’s under Blue Oval Ford Charge Network, and it’s under the FordPass app. So, when you buy a vehicle, you get free charging, certain amount. But more importantly, under one system, you — you got automatic payment across that whole network.

All the best ones are plug and charge now. We were the first people to launch that, so you just plug it in and the car detects automatically, sets up and pay. Just plug and walk away. Did you come (inaudible) over-the — over-the-air? So that was our strategy.

And the reason is is because huge investment is going to come into that now. Now that companies have seen cars coming, they’re going to put huge investment in. So even before we talk to my podcast, we had 13,000 and 60,000, but we’re — we’re already up to 90,000 now.

RITHOLTZ: Wow.

PALMER: Ninety thousand plugs. Because it’s growing every day, because, as I say, (inaudible). And they tend to be regional, the networks: East, West and Central, so on. So, we — we incorporate them really fast, so really just a few — a couple of weeks. And we made a software system that it’s very easy to integrate with, and so nobody ever said no to us. All of the networks are in. And it will grow hugely. It will be — it’s the biggest network in America today, and we need to do more to communicate that because I noticed people don’t know that yet.

RITHOLTZ: I didn’t know that.

PALMER: But I’m …

RITHOLTZ: I’ve — I’ve spent the …

PALMER: Yeah.

RITHOLTZ: … week researching what you guys are doing. That — that’s a — that’s a surprising datapoint that I think would — could be a deciding factor for someone who has ranging side, even though we know 90 percent of the trips are — are all local.

PALMER: This is correct. And so, I’ll definitely — am going to amp it up this year to communicate that. But one of the reasons I’m wanting to hold on that is because I need to make sure the quality is there because the risk of — if you got multiple networks is the quality is not there. So, we are remotely monitoring all of the stations.

And you would think that’s enough. For a while, we thought that might be enough, but it’s not actually because the terminals are — you know, they have payment systems on them, and it has to go through quite a few steps before it triggers. And if one of those steps goes wrong, it doesn’t allow you to charge. So, we found that, in some cases, your system looks like it’s working and doesn’t. And so, we decided to put out a group of people who they called the Ford Charge Angels. And they’re roaming the network with highly instrumented vehicles.

In fact, we had to specially order the instrumentation systems. They’re very unique because they monitor all of the signals going between the car and the network. And they are roaming the network with a sole mission to test charges everywhere, especially if there are hotspots. And then when we know there’s a problem, they — we — we’re very connected to the charging networks. We got the CEOs on speed dial, and we even asked him to repair. And if they cannot repair in a time that we deem effective for our customers, we remove them from the network so that — so that customers are never sent to a faulty charger. And — and we can do that really fast now. We’d (inaudible) the system to do that.

And the — the networks are often fixed there and then. If they can’t and it’s not quick enough, we take it out so that you do not get routed there. And we’re unique in doing that at the moment — the only company doing that.

(COMMERCIAL BREAK)

RITHOLTZ: You’re coming up on a 100,000 chargers, so if you’re looking for an excuse to make a big announcement, I would imagine that number as is — as good a reason as any, but — but let’s talk about charge times.

One of the complaints some EV buyers who have been dragging their feet have — have mentioned has been the long charge times. What’s the future of this technology look like? Will we ever get to a point where the seven minute or five-minute fill-up that you would get a gasoline, you could do the electricity. What’s — what’s the best we can hope for?

PALMER: Yeah. So, one of the things I’ll say is — and this is like when, you know, you have a flip phone and you’re looking at iPhone technology, and you think you know what an iPhone is, but until you owned one, you didn’t really know what it does. And it’s like saying, “Hey, my flip phone lasted four days and my iPhone has to be charged every day. Therefore, I don’t want an iPhone.” He’s like saying that.

But when you own an iPhone, you realize you just plug it in and out, and it fits perfectly with your life. If you go on a long trip with an iPhone, you might sometimes charge it with a backup battery or a quick plugin because you know you’re going to be using it all day. So — but nobody — nobody went back from an iPhone …

RITHOLTZ: Right.

PALMER: … to a flip phone. And BEVs are the same.

The perception from people is, oh, I need a vehicle that’s exactly the same as my last vehicle.

RITHOLTZ: Right.

PALMER: This is a massively common misconception. For example, I — I’ve owned a Mach-E for now a year and a half. I never had a car for more than a year and a half as my company car. And every day it’s plugged in at my home, and I leave every day with a full tank. When I go on a business trip, I leave the airport of 100 percent. I never ever stop to interrupt my day to fill my car up, not once in a year and a half because it’s already always ready.

And that’s what people forget about this that the — the thought of having to go and get gas while I’m about to go somewhere and I’ve forgotten to fill it is horrifying to me now. It makes me angry. And then when I go on a longer trip, I — I type it into the route planner system, and it tells you where to stop and when. And I drive for three hours, and then I stop. I plug it in and walk away. It takes me precisely 10 seconds to charge my car. I plug it and I go and do something else. I go and get a coffee, or I go shopping because many of the sites have shops next door, or I pull out my laptop and catch up with mail.

By the time I look back up again, I realized I’ve overstayed, and my car is now fully charged, most of the time to be honest, or I talked to somebody who’s come to talk about the car. That happens a lot as well. But really, you know, it’s a different way of thinking about it. It takes me thirty seconds to charge my car because I plug it in and then I’m doing something else.

Most owners of (inaudible) BEVs will feel the same about it. You know, so — so I wanted to say that first because that changes your life and your way you think about these products.

Now later, it takes on a typical trip the car will usually take about 20 minutes to charge because it — it usually hops you between fast chargers, and it will favor the fastest chargers. And on most trips, you’ll stop and you’re trying to get to a destination, so it’ll boost you quickly. The beginning part of the charge is faster than the later part, so it will tend to optimize you by charging maybe 20 minutes or 22 minutes or something. That’s just long enough to go get a sandwich, restroom, and back to the car really. And you’re off again. So that’s what it tends to do.

Now, do we have technology later that will charge even faster? Yes, we do, like 800-volt system, so they would charge even faster, you know, under 20 minutes for the entire charge from, you know, 10 to 80 percent. Yes, these are coming as well.

But honestly, it makes less difference to your trip than you think it does. So instead of 22 minutes, you — you’re there for 10, OK? But you — as I say, you plug and then go and do something else mostly. So, they will get better, but the cars are ready now. You see the common misconception. We don’t need to wait. We have 300-mile cars, and we’re up to 323 now.

With that plus the network that’s out there, we’re ranking immediately, especially you mean a lot of customers using it as their second car. It’s a complete no brainer. So, it’s just — we have to do more to communicate that to customers and bring customers along with us.

RITHOLTZ: Three hundred miles means that if you’re driving 60 to 70, which is what the highways by me, are that’s four, five, six hours of driving. You still need to get out, stretch your legs, go to the bathroom occasionally.

PALMER: Yes, that’s right. And most people will — won’t go below 10 percent. You know, they’re a bit nervous so they don’t usually go below, so you have to save that 30, so it’s like 270 miles. But you’re right, if you go in faster, it’ll be a little bit less, but it’s quite a long time and most people need to stop and rest.

RITHOLTZ: Yeah.

PALMER: And — and then you just build into your day (ph). I like to say, you — you — when I’m on — going somewhere for a business trip, I stop halfway, plug it in, get a coffee, and then catch up on some mail. And so, usually — but it’s — I get into it. I look up and oops, I’ve stayed longer, and now I’m really fully charged, so I didn’t just boost here, I charge right the way back up to 80% or 90% now, and off I go again. And I arrive with too much range, and then plug in at the hotel, it’s ready the next day. So, it just fits into like more than you think it does.

And the F150, over 300 miles, grow very robustly over 300 miles.

RITHOLTZ: So …

PALMER: That one is even better.

RITHOLTZ: So — so the folks who are shopping for 500-mile range or even talking about 800 and a 1,000-mile range, that seems — based on what you saying, that really seems like it’s unnecessary and not practical because the human element, even with driver assist, the human element is still going to get fatigued and still needs to occasionally stretch their legs.

PALMER: So, you know, there are use cases for those vehicles and only one really does that kind of range at the moment. And — and so that’s — some customers need that, so that’s OK. But — but you are carrying. It’s not like gas. You are carrying extra weight with you. And — and every day that is costing you money and — and is changing the performance of the car, and it has all that weight for handling. So, carrying a 500-mile battery when you really do 30 miles a day is a real waste.

So, you know, there’s an optimum, I would say. And — and for some use cases, you know, that’s OK, but it’s a rarely use case. And so, we’re seeing — once you reached 300, it — it really changes the impression of the customers. They’ve become much more confident around just over 300 miles.

RITHOLTZ: So last battery question, one of those issues I — I’ve read about is the question of either recycling or reusability of E.V. batteries is — are either of those anywhere off on the horizon?

PALMER: Oh, yes. So that’s super important to us and for two reasons. It’s becoming clear that the supply of batteries and all of the chemicals needed are real challenge. And as the whole world ramps up to electric vehicles, it will split into those that are able to get the materials and batteries and those that are not. And if somebody hasn’t started already and is very far advanced into that, they’re going to have a huge problem. And so, that’s why you’ve seen that we invested over $11 billion dollars in Blue Oval City, the largest that I know of investment of this kind in America. And it builds an entire city to build trucks and then — and also two plants so far for batteries — a huge amount of batteries. And it also vertically integrates the chemical supply required for the batteries. So that’s the first stage so — because we know that we need to secure enough batteries from millions of cars.

RITHOLTZ: Where is that plant …

PALMER: And that’s why we’re (inaudible) …

RITHOLTZ: … to build those batteries located?

PALMER: Tennessee.

RITHOLTZ: Tennessee, because — am I remembering this correctly? The Mach-E was made, I — I think, in Canada or Mexico. I don’t remember which.

PALMER: It’s — it’s Mexico, yes, because that was the next plant that we had available, and so that’s why we went there. You know, we — we’re going to be using lots of our plants, and — and — and — and — and — and we’ll fill them up as we go. So, we — we kind of filled them up with whichever plant is ready and some other factories actually. That’s why that one was Mexico, and the F150 is Dearborn. And so, we’ll — you’ll start filling up all our — our gas plants one at a time.

So BlueOval City complex is six miles square …

RITHOLTZ: Wow.

PALMER: … in West Tennessee. And the Battery Park, correction, is Central Kentucky with twin battery plants. So, you know, it’s — it’s huge, but a really exciting one. And one you asked me is about recycling, so we tied with Redwood Materials. J.B. Straubel was one of the founders of Tesla, and he now runs a company called Redwood Materials. They have very high ambitions in recycling. And we are partnered with them, and so we are beginning now using scrap from battery production to recycle it to produce materials for new battery production.

And as the battery start coming back, we’re going to start using them to extract materials and reuse them back into our supply plan. It does two things. One, it secures battery supply when some of these chemicals and materials could become scarce and also allows us to reduce the price. And we have some quite ambitious price targets for that recycled material.

And I mean, they’re commodity so they move up and down every day. You know, in some cases, it looks a very good value compared to buying on the open market. And your market forces will determine the price of those chemicals. So, we — we — one of the biggest operations that I know of to do that, and they will be onsite in BlueOval City from the start.

RITHOLTZ: Huh, quite fascinating. Let’s talk a little bit about some of the things that we’re looking at in the future. You mentioned how proud you are of the price points that you’ve introduced cars like the Mach-E or the E-transit (ph) or the 150 Lightning. What do you think is going to happen going forward in terms of pricing?

I — not a — not a battery hybrid, but a regenerative, I guess, PHEV hybrid, the Maverick, was priced at — pretty inexpensive, $22,000 for a — a compact four-door pickup truck. How cheap can battery EVs get in the future?

PALMER: Well, today — so the — the F150 Lightning, with the included incentive that’s available, is really in the range right now off gas F150 right in the heartland of where we sell most of them. So, I could argue that today we have a — the — one of the first vehicles that has reached parity with an equivalent truck. And I say equivalent, yet the electric is faster than any F150 we ever made, more talk than any F150 we ever made. Quieter, it handles better, et cetera, et cetera, than any F150 ever, and it starts at the price of the gas. So, there’s one segment that we’ve managed to achieve. That one is with the incentive, so that’s helped us, helps it bring to — bring it to more people.

We are working on other vehicles not announced yet to bring the vehicles to — to more people, a lower cost vehicle. I can’t say anything more about it at the moment …

RITHOLTZ: OK.

PALMER: … but that’s one of our missions. And part of, well, the huge investments we’re making in batteries is obviously supporting that because the biggest component by far is the battery.

And already, I can say that a Mach-E is a similar cost to run over five years as a Ford Escape. The total cost spent is the same as a Ford Escape already, so that is also supported by an incentive at the moment, but that’s amazing. For those that wake up to see that now, they gave me a huge bargain. And the charging network has already reached 90,000 plugs, so they’re available everywhere, and there’s hardly anyone there yet. So, you also have the network to yourself, so it’s — E.V. ownership at the moment is just fantastic.

You’ll also find the parking spot for many places right next to the entrance because that’s where the electric spot is, and they’re half-empty as well. So, when you drive there, you feel like a VIP. So, it’s a really good time to get into them now, but we — you know, we do have plans to bring vehicles that are even lower cost. And we’re moving to more segments, so the three rows are next one along where a real family car size that is so popular in America.

RITHOLTZ: So currently the Ford Explorer, which I think comes with a third row, is available hybrid. You mentioned you’re looking to do a three-row SUV. Can we assume we’re going to see an E Explorer sometime soon?

PALMER: So yeah, we’ve announced that we’re working on that one. It’s — it’s — it’s a three-row and the Explorer is indeed three-row. And so, we’re working on that now. But I would say it’s the same segment as a three-row Explorer. I wouldn’t call it an E Explorer at this point.

RITHOLTZ: OK.

PALMER: We — we intend to reinvent what these vehicles can be. And again, it will not be an explorer of an electric motor in it, it will be a new — a vehicle that offers new experiences that (inaudible) is game-changing and spy directional power and mega power frunk is for the F150, but — but something — things that are designed to delight the customers in this segment with things they want in their daily lives.

I want to say more about it yet, but …

RITHOLTZ: OK.

PALMER: … it tends to be a — an incredible vehicle again.

RITHOLTZ: So previously you said E.V. adoption is similar to the process that the iPhone had to go through any — any groundbreaking product, requires a — a readjustment into your life. Is that what you’re seeing with E.V. the option once people make it part of their routine? It’s no longer the electric car, it just becomes the car?

PALMER: Oh, yes. I mean, universally when people make the switch, no one goes back. This is the only analogy and when I try to get across to people to use is the whole moving to iPhone or smartphone from flip phone. No one goes back.

And before people moved, they didn’t know that. They thought they understood what an iPhone was, and because it looks similar — well, it’s similar to a phone, but they don’t — didn’t realize what it really is. And — and once they owned it, then they suddenly switched. They’ll never go back, and they told everyone like that. EVs are exactly the same.

The most misleading thing about EVs is they look like a car and, therefore, you think it’s like the cars you’ve known all your life, and it’s nothing like that.

RITHOLTZ: So …

PALMER: And so, the more people we can get in there to feel it, the more people it will convert quickly.

RITHOLTZ: So, let’s talk about that. You know, a lot of people a few years ago were projecting 2040, 2035. It doesn’t feel like it’s going to take that long. Where do you think the E.V. market is as percentage of new vehicle sales in 2025 or — or 2030?

PALMER: Yeah. So, if you think every person who gets one, who never go back, that’s pretty much the rule.

RITHOLTZ: Right.

PALMER: Then you start thinking about how far is that going to take? Now, it took 10 years for the iPhone to get everywhere.

RITHOLTZ: Right.

PALMER: You know, now all or similar phones, right? So, it took time for that because people take time. And so, projections we change weekly, you know, because we’re trying to keep ahead of it. We — we — we intend to be — push ahead of the market. And we’re saying, you know, globally, you know, half of our production is going to be electric by 2030. That’s millions for vehicles a year.

RITHOLTZ: When do you think the last internal combustion engine car knew this is manufactured in the U.S.?

PALMER: Oh, that’s impossible to tell. There’s — there’s some use cases that are particularly difficult to solve for battery. And I actually think it’ll run for long a long time, but they will be — they won’t — they’ll be, you know, for specific reasons or for price. That’s — that’s why they will keep going.

The best products will be electric. It’s like — I mean, even if you look at tools, I recently bought a lithium ion leaf blower. And the first-generation were little bit less powerful than gas and much more expensive. Well, this next generation I had a choice, same as gas and just a little bit more expensive or much more powerful than gas and more expensive. And that — that happened just a couple of years. By the way, it’s much quieter, much more controllable, and I’m never going back to a gas one. But there are use cases for gas (inaudible) still in certain cases, right?

So, I think gas will run for a long time. It’ll be increasingly regulated for emissions, and it will get more and more expensive to regulate for emissions. There will be less and less reason to — to need it. But I believe there’ll be a reason for a while, so it was impossible to predict at the moment.

RITHOLTZ: So — so let’s talk about interior design in electrics. I think Tesla gets the credit or the blame for just removing just about every manual — mechanical button and putting it on the screen. I personally have found that to be frustrating if — especially when I’m driving, and it’s three — nested three levels in, and I have to take my off-the-road because I just want to lower the fan or increase the heat. What sorts of button should stay a mechanical button? Like if I want to put my seat heater on, why do I have to dig my way through three or four menus and — and go down?

Just the — just the air-conditioning/heating system, can we please keep that as mechanical buttons?

PALMER: So, here’s the way we think about it. So how — how many buttons on the front of your iPhone?

RITHOLTZ: None.

PALMER: OK. Do you …

RITHOLTZ: Right?

PALMER: … read them? Would you like me to put some buttons on the front of your iPhone?

RITHOLTZ: Actually, yeah. I — I have the — on the side, I have the Volume and the On/Off, which — which — but the — it’s the things that I use every time I get into the car I don’t want to go digging for.

PALMER: That’s — that’s right.

RITHOLTZ: And by the way …

PALMER: (Inaudible) …

RITHOLTZ: … half of my cars have too many buttons. I have — you know, there are vehicles that have, you know, looks like it’s a fighter jet. I don’t need that either. I like the idea of the — the screen but, you know, the — the heat — the seat warmers are a perfect example.

And one of things I thought was so interesting about the Mach-E was the Volume button was a physical button at the bottom of the screen. And when you turn the screen on, it — I believe the same set of haptic touch buttons are at the bottom of the screen always. Am I — am I remembering that correctly?

PALMER: You — you are. So — so the philosophy is this — it’s the reason why I ask you that question. The philosophy is you — you want to do better than buttons. OK? That’s the philosophy. And the ones that you need when you need them should be first service. The whole point is that you do not have to dig and you have access to when you need it. And that’s the skill in getting that just right.

There are some things you need buttons for or — or control sticks, like the indicator. I imagine that we’re going to have the control stick for a long time because you use it all the time and — and it works really well. So, don’t take that away. And certain other things like the button to get out of the car, you really need that. But other buttons can be better when we can move them or change them to context.

So, for example, you mentioned I want heat seat immediately, so yes, we keep the heated seat on first surface at all times on the Mach-E. And you want access to the heating controls, absolutely, and temperature and so on. So, we — and we launched the car with a set of buttons that are pervasive, that are always there. Then our customers gave us feedback, and they want an extra button or one taken away or they want the hood release to appear when they stop.

Now with an electronic screen, you can change it, and we’re about to change it over the air actually. We’re going to do a big human machine interface refresh this year, and we’re going to listen to the feedback from customers and make it better. And that’s the great thing about a digital screen. You can make it better where physical button is there and you can’t. I’ll give you an example.

A button for the cameras on our vehicle, people say, “I got to have the button on a — on a truck. I’m always using the camera.” So, I say, “Well, at the moment, you have to press the button once for the front, press it again for the rear, press it again for another view, and — and you press it so many times, and you get it wrong, and you cycle back around again.”

RITHOLTZ: Right.

PALMER: Instead, as soon as that sensor senses something nearby when you’re at low-speed (inaudible), it automatically brings up the canvas. And then it presents you with the direct camera button for the feed that you want, and then it remembers the one you use most. So now you pull up to the parking space. It automatically brings up your favorite camera. You don’t touch anything. If you don’t like it and you want a different view today, you just one-touch a new view instead of pressing the same button four times.

So that’s — you know, another example of — you think you want the button until you have a system that works better. Now we understand you can’t always guess perfect, so you always give the customer the controls, but you bring them at the right time. You don’t need the camera button when you’re at sixty miles an hour. So that’s the design, and we never get it perfect first, so we have over-the-air update, and we keep improving it.

And that — that control knob you mentioned, that’s an amazing piece of technology. It’s brand new, it’s molecularly bonded to the screen. First in industry. And that’s actually — it’s actually like an input device. It’s not — it’s not just a volume knob. And we’re going to unlock that in the next — in the software update later this year. It’s going to — so that it can be called lots of things because it’s very pleasing when you turn it. And it feels good, and it control volume, but we can also make it control temperature, heat, and other things. And we can use it for gaming as well.

So, we’re about to unlock that button. It was always planned. We couldn’t get there for job one (ph), but — but now we have customer input, so we’re going to make it better.

(COMMERCIAL BREAK)

RITHOLTZ: So, I — I have two other questions — I have two or three other questions I have to ask you before we get onto our favorite questions, the first you hinted at earlier. I was reading your prowling on social media looking for people complaining about their products and helping them resolve whatever issues they have. You personally call them. Tell us about — about what you’ve — why you do that and what you’ve learned from that.

PALMER: Yeah, as — as part of the launch of the vehicle and watching startups, we learned how they watch social media because these are exciting products, so people talk about them all the time. So, there’s a — there are forums like the Mach-E forum for — for Mach-E, obviously. And it’s a rich source of direct customer feedback.

The customers are taking video photographs, big descriptions about what they see both positive and negative. And it’s the richest source of input I’ve ever had, so I watch it every morning. My whole team watch it every morning.

My wife is sick of me watching videos every minute I get because the customers are telling you directly what they see. You can’t buy that. And then we use that to — to develop the cars. So that’s why I watch that.

Then I see customers struggling with things we’ve already fixed. And at first, the buyers of the premium Mach-E, they were really BEV people. They really did their research. They are experienced before. All they’ve done a lot of research, and so they all help each other. You watch them struggling and then they help each other. And they — they’ve learned it now. It’s no problem.

But when we went with the G.T., noticing more customers are having basic problems because they — they haven’t learned the basics of E.V. They just love the car so much, so they bought one. So those customers, I’m seeing that, and I call them because I want to hear from them what they’re experiencing. And every time I never hear what I think I’m going to, I think I know, I speak to them. It’s almost never exactly the same.

So, I do that a couple of times a week. I ask their permission, of course. They love that. There hasn’t been one that haven’t ended up with — on an hour (inaudible) hearing about their experiences and, you know, their family and, well, how they’re using the car, and so on. And they’re the richest source of input. And then I work out how might I help people like them.

And, for example, with the newer cars, they don’t know the basics of E.V. They don’t know the EVs drop range in the cold.

RITHOLTZ: Right.

PALMER: They don’t know how much power that their heater can use, especially if they left it outside and the whole battery is minus 10-degree C.

RITHOLTZ: Right.

PALMER: They don’t know to preheat. They don’t know that the car will heat its battery when it’s plugged in. It will make sure the batteries kept optimum. They don’t know that.

And finally, they don’t know how to reset their driver history. The car has learned their behaviors over a week, and — and will give you an accurate range. It’s very accurate. But if the customer has not been looking after the car as a BEV owner, then their range is going to drop a lot. And they can instantly reset it back and then change their behavior and they will see the results immediately. So, they don’t know any of those things.

And I show them that. They are usually super delighted, and then they’ve learned how to control their car. They change the — you know, the temperature a couple of degrees. They used their heated seat and steering wheel, and they preheat the car. Their range goes from a massive loss to like five percent loss. And then they write to me afterwards and they’re just absolutely delighted.

So now I go back to my team saying, “How are we going to show customers?” We have put in the instructions. We have put it on the app. We have sent them messages, and we do tell them to plug the car in if the temperature is cold every time they exit the car when it’s cold. But they — they don’t know why they got to do it, so some customers just ignore all of that until we speak to them. So, we’re trying to think of how to help them.

And I’m — I’m — we’re trying everything. It’s basically psychology, so I’m — I’m thinking of all different methods and my brain is telling me how will we do it. And different customers, each one is different and have their own ways but, you know, one way I’m considering at the moment is a kind of competitive way where we say to you, “Hey, did you know we’re in the bottom third of range for this car?” And that’ll make the customers say, “Hey, why am I in the bottom third?” And then we’ll explain to them, and now they’re listening because they’re interested.
RITHOLTZ: So, you’re — you’re bringing a little …

PALMER: So, I’m thinking of …

RITHOLTZ: … a little peloton (ph) game of occasion to managing range.

PALMER: That’s right, to — to get their attention so that they care. I mean, many customers know already, but a lot down. And as we go mainstream, there will be more of those, so it’s really fun to do it. But that’s why I call customers. It’s great fun anyway. I love — I love talking to them.

RITHOLTZ: So — so — and …

PALMER: And — and hit him (ph) feedback.

RITHOLTZ: Really interesting. I know you do a lot of travelling. You — you previously discussed an interesting scenario in Shanghai about how families sit within a vehicle and how different it is from the U.S. Can you explain that? And tell us about some other differences you see in customers around the world, how the different users use their vehicles differently?

PALMER: Oh, yes. So, we’re all humans with similar needs, but due to cultural changes, we behave differently. So, we were developing global vehicle, and China is one of the leaders in electric vehicle development, so we spent a long time there actually. I think I was sixteen weeks in China in total that year. And we — we did human-centric development, which means you don’t ask them what they want, you watch them with their permission, of course, and — and watch them with their families. And — and we had people to translate for us not just the language, but the — what’s going on.

And frankly, as I’ve been watching them without those people I would’ve missed it. And — and they would — we watched them in the car and where they sit, and then we asked them questions, and then the person — the person would say, “Did you see that?” I say, “See what?” I said, “Did you see how the question was asked of the man? Before he answered he looked at the grandmother.” “No, I didn’t see that.” I said, “Yeah, well, do you know where that is or I don’t know what that is.” That’s because it’s typical in Chinese culture the grandmother will be buying their first car for the family.

And so, — and the — and the grandmother also will — will take — will vow to the child. The child will be in the second row, and so the grandmother will be even next to the child or in the third row because the mother will be in the second row looking after the child. So, the third row of the car is super important because the grandmother is buying the car. I said, “My God, we would never would’ve known that.” And we did not give the attention to the third row the same as the first row. That would not have been on plan.

And so, things like that, you can only get by watching people and learning. And — and even if you ask a Chinese person, “What’s different about here?” No one can answer what’s different between me and everybody else because they don’t know what to say. You have to watch them and say, “Oh, look, that’s different to what we know.” So that’s — that’s — that’s one there. That’s one observation of many, many, many, but that — that taught us a lot.

And when they’re evaluating to buy that car, the grandmother will get — will come — will come with them, will sit in that third row and will give them their opinion on the car. And — and — and the buyer is going to pay attention to that grandmother just because of cultural and also the fact they’re buying the car. So that’s one.

Others in, I’d say Europe, many more people don’t have a garage, so they can’t put a charger in. And so, they’re very interested in how they’re going to own an electric car having to go and charge it. And that does require some change to your life — I mean, build that into your life, but you do have to consider it so that they have different priorities for charging speed and where those chargers is available to them and so on. So, we’re having to make sure we make vehicles that suit their life. They typically want the 800-volt vehicles that charge faster because they going to have to go and sit there every week.

I also have some other customers about how they live with their cars, and then one guy I asked him, I said, “Hey, would you want to change that charging speed to 15 minutes?” He said, “No way.” Actually, “Oh, that surprises me.” He said, “That’s the best 40 minutes of my week.” I go out, I sit there reading a book and charge the car. I said, “OK, (inaudible) do that?” As I say, your customers don’t say what you expect when you ask them.

RITHOLTZ: Quite, quite interesting. I’m going to throw you one curveball question before we get to our favorites, and that is I have to assume you saw the film, Ford Versus Ferrari. What were your thoughts on that story? And you grew up in London. Were you a fan of Ken Miles?

PALMER: Yeah, that’s a good one. So, I mean, we love that story. We — we — we all went as a team to watch that — to watch the — you know, the other struggle, I mean, and it’s all about, you know, people feeling you can’t do something and then overcoming it. You know, that’s what — you know, of course, it’s all about (inaudible) corporate Ford there. You know, it’s — it’s fun to watch, right? It’s done in a really cool way, but really, it’s obviously about cars and about pushing yourselves to win and when you didn’t expect it. We all love that.

We felt a little bit — you know, no one expected us to win within electric car. When we said we were introducing electric car, I think it’s fair to say most of the world did not expect us to — to — to be the number one recommended car this year with Consumer Reports in our first-generation. I mean, I’ve got to say that’s kind of a stretch even for us. We expected to do well, but that is beyond what we — what we achieved. We respect what’s gone before us.

So, we saw the alignment of that film with some of the work we were doing. And — and Ken Miles was a super unique individual and that he’s got his flaws. Like all heroes, they’ve got their flaws, so we — we love that. We all went to watch it together. We — we’ve watched it many times.

RITHOLTZ: Really interesting. Well, I know I only have you for a few more minutes, so let me jump to my favorite questions that we ask all of our guests starting with what have you been streaming these days? Have you had a whole lot of time to watch anything on Netflix or Amazon or anything like that?

PALMER: So, I’ve got twin boys as well, 10-year-olds, so it’s work and family. That’s it. And — but when I — I listen every week, I listen to the InsideEVs podcast, Tom Moloughney, and Domenick, and Kyle, they are super geek about electric. And I find it fascinating every week. I met — I’ve met them, and we’ve — we’ve been through some of the cars together.

Taking Tom in the F150 for the first time was amazing. He’s super experienced with the EVs, and he was still amazed by the product, so he was the journalist I — I referred to. It’s so cool to see him so excited about it. He’s ordered one. One of the first people to get it.

So, I love that podcast because he’s so detailed, and that (inaudible) so much and they care so much about getting it right. They’ve worked with EVs for 15 years or more. So that’s what — that’s one of the first things I listen to. When I — when I’ve got time, I use — I do it while I’m doing other tasks. I listen to it every week.

RITHOLTZ: Really interesting. Tell us about your mentors. Who helped shape your career?

PALMER: Yes, so I always love Virgin (ph) and what they did there, so external, let’s say, because they’re totally focused on the customer. As I went through my career, that’s the thing that I grew to do. That’s my trademark. I love just making amazing stuff that they love. So, he is obsessed by customer, and — and so that — that’s one of the things I — you know, he — he was a inspiration, still is now and — and saw how that work out. You know, you look after the customer and everything else will look after itself.

I had early mentors in engineering. It was superb engineers. And one guy — a guy called France Lemmen (ph), he was retiring in — in — in Germany. I worked in Germany for 10 years. And when he went to do his retirement, they had to move it and we didn’t know why. And he — and they moved it to the showroom, and he turned up to the showroom. There were 3,000 people there.

RITHOLTZ: Wow.

PALMER: Everybody from the site had turned up. It was unbelievable. They had a moving speech on stage. And — and I — I have formed a habit of interviewing those who are retiree, ask them, and always not one ever said no. And I sat down with him, and I said, “Could you give me one piece of advice?” because the guy had been so effective, so loved, had done so much. You know, so you know what? Could you tell me one thing that you — that you would pass on?” And he said yeah straightaway. And he said, “The beginning of my career, I — I — I would focus on the most academic, the most brilliant, and this is how it achieves (ph) people.

But by the end of my career, I — I also — I saw a different — I saw a person who wanted to do it so bad they’ll do anything, but learned everything they needed to about it. And all of our employees are very educated. You know, we’re lucky we (inaudible) great institution, so they’re all — they’re all clever.

But when — when somebody really wants it, they’re prepared to do anything to work to get it, he said, “Those people always do well because they want it so bad.” And he said, “That’s how I recruited people from then on.” And I never forgot that.

When I’m interviewing now, if someone is not perfect background, that doesn’t matter. If — if they got — they’ve learned about the subject and they want it badly, I will give that person a chance and I — and it’s never worked out wrong since. So that was an early mentor, maybe 10 years ago, but I never forgot that. So that’s — that’s how I feel my team is up now.

RITHOLTZ: Really interesting. Let’s talk about books. What are some of your favorites and — and what are you reading right now?

PALMER: Yeah, so “Team of Teams,” by General Stanley McChrystal and David Silverman.” Amazing. He’s using the story of the teams in Afghanistan and what they faced and how to — and then its relation to business. And — and it’s really about instead of one person at the top telling everyone what to do and they all have to come to them in their bottleneck, instead you made teams of teams. Each of your teams, you make sure you’re aligned on what you’re trying to do, and then you give them the space to operate, and you trust them and either can be much more effective that way. And that’s what they found in Afghanistan. Each team was independent and could — could operate even without communication back to the central. Amazing. So that’s one.

Another one is called “Nudge” …

RITHOLTZ: Sure.

PALMER: … from Cass Sunstein and Richard Thaler, just amazing, about how a lot of companies and society nudge you every day. And you have no idea how much you’re being nudged that it’s super important. And when you’re developing cars and products, if you nudge someone where the right button is pressed, they’ll press the button. If you don’t, they — you know, they can’t work out with the button. So, they use it in supermarkets and all the things you might imagine. It’s a fascinating book. I really — so I really recommend that — that, you know, your — your listeners read that one. It’s just a wonderful book.

RITHOLTZ: Quite interesting. And our final two questions, what sort of advice would you give to a recent college grad who is interested in a career in either automotive design and manufacturing or battery and — and electronic technology?

PALMER: So, I would say, you know, do your research. Look at what customers are saying, and — and think about what you would like to do as part of that. And then — and — and build your knowledge up first, show your interest in it, and then approach some companies who you feel are — are moving in that space or you think maybe leading on winning in that space.

And once upon a time, that was really Silicon Valley. Again, we can see that was really moving, but I — I believe now, you know, you’re seeing automotive companies showing they’re moving into technology, some extremely interesting technology, and we were battery electric vehicle future. And autonomous, I think it’s one of the most exciting sectors.

And if you come to these, you can make a difference here. You’re not just a number, you — you will have — you’ll be able to train them and then make a real difference in products that are the second most expensive thing that people buy in their lives.

And I think — I think I would say there was a time when people said, “Hey, all calls are going to be similar soon, and there’ll all be a commodity. And that made me very sad. And I think we’ve seen the first round of battery electric people’s could be more wrong.

RITHOLTZ: Really?

PALMER: They’re — they’re nothing like that. They’re just like gas in the fact that there’s a whole suite of products with different attributes in field to them, and there’s a new level of performance that we could never do with guys as well. So, it’s even more exciting than ever before, so I — I think this section is extremely important.

So, look for some of the companies that you admire in that space. Don’t forget about the OEM automotive companies because I think there’s no way I would rather be than in this company doing this. This is even more exciting than the startups to me because we’re going to change the world with this.

RITHOLTZ: So fascinating. And our final question, what do you know about the world of technology, automobile manufacturing, design today that you wish you knew 25 years ago or so when you were first getting started out?

PALMER: Wow, yeah. So, I mean, it took — it took me years of working as an engineer in my little world, taking targets from whoever gave — you know, gave them from above. I’m working in my closed area with goggles on, right? That — that’s how I worked for many, many years. I didn’t I wasn’t looking up to where my contribution played into the full vehicle.

They didn’t really encourage that either, and I wish I said, “Hold on a minute. What am I doing? And we have? And it’s that world-class and how can we push the boundaries. If I’ve done that earlier, already been even more exciting.” So, it’s just you tend to get into a job, especially in, I guess, the big OEMs, you have a small cog in a big system. I wish I had looked up earlier. It’s where does the small cog fit and why? And I’m encouraging everyone in our company to do that now. And — and certainly everybody in Model e is going to be doing that.

So that’s what I wish I knew 30 years ago. I wish that wider view while I’m — it’s important to get into details and work on details. And very important, but you also must keep that overview of where this fit in them why.

RITHOLTZ: Really quite fascinating. Darren, thank you for being so generous with your time. We have been speaking to Darren Palmer. He is the General Manager of Battery Electric Vehicles at Ford. If you enjoy this conversation, well, be sure and check out any of our previous podcasts that we’ve done over the past eight plus years. You can find them at iTunes, Spotify, Acast, wherever you feed your podcast fix. We love your comments, feedback, and suggestions.

You can write to us at mibpodcast @bloomberg.net. You can sign up for my daily reading list @ritholtz.com. Follow me on Twitter @ritholtz. I would be remiss if I did not thank the cracking team that help you put conversations together each week. Mohamad Rimawi is my Audio Engineer. Sean Russo is my researcher. Paris Wald is my Producer. Atika Valbrun is our Project Manager.

I’m Barry Ritholtz. You’ve been listening to Masters in Business on Bloomberg Radio.

 

~~~