Raw material prices continue to be a hurdle for Ford Motor, CEO Jim Farley told CNBC’s Jim Cramer on Wednesday, but the company was able to offset them with its pricing strategy.
“The pressure on the goods, the first-class freight we see, I want to say is really real … The good thing is that our prices have offset all this. I believe we are earning less as a company, so we have more to do this year, next year, the next few years, “Farley said in an interview with Mad Money.
Some of the products Ford has seen higher costs include steel, aluminum, nickel, cobalt and lithium, according to Farley.
“We had some really bad goods that kept our most profitable units and we think this is an area where we have an increase in the second quarter, the second half,” he added.
Farley’s comments come amid fears on Wall Street that higher costs and supply chain problems will push General Motors and Ford’s profits this year.
The CEO also said the company plans to take further pricing action, especially on its electric vehicles. Farley told CNBC on Tuesday that he believed the company would be able to produce 150,000 F-150 Lightning EVs next year, even in the face of supply chain problems.
Ford reported better-than-expected revenue and earnings in its first quarter on Wednesday. Shares of Ford rose about 1% after business hours.
Disclosure: Cramer’s Charitable Trust owns shares in Ford.
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