The Australian-led design, engineering and development base for the Ford Ranger is under threat from rising costs due to local emissions regulations and the ‘innovation premium’ of doing business in this country, according to Ford CEO Jim Farley.
Mr Farley, who is at the Australian Grand Prix in Melbourne this weekend to support the debut of Ford’s partnership with Red Bull, said the local engineering for which the Ranger is renowned won’t continue if the federal government’s New Vehicle Efficiency Standard (NVES) isn’t tweaked.
“It’s a choice, because that engineering can be done in a lot of other places cheaper and faster,” Mr Farley told media including CarExpert.
“Here in Australia, versus China or Vietnam or other places, there is a premium for innovation. So we’re willing to pay, but your government has to decide if they want engineers in their country, or do you want a country of hairdressers and bankers?”
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“They need to decide if they want to help us equalise the cost differential, because this is among the most expensive places to have engineers on the planet.”
The current-generation Ranger’s engineering ‘homeroom’ – the engineering hub of its development – was at Broadmeadows in Melbourne, where local design and engineering teams produced the Ranger and its spin-offs, the Toyota Prado-rivalling Everest large SUV and Ford Bronco off-roader (not sold here).
It also engineered the Ranger Raptor and its latest product is the Ranger Super Duty, a rival to the Toyota LandCruiser 70 Series.
The Australian-engineered Ranger led to the nameplate being reintroduced in the US in late 2018, following input from local teams given its important role in North America’s competitive mid-size pickup market.
Ford’s Australian development team has been shrinking over the last few years as the next-generation Ranger – believed to be due around 2027-2028 – nears its showroom arrival as an even more critical global model.
Also looming over Ford Australia is the NVES, which enforces increasingly lower CO2 tailpipe emissions limits for new vehicles between 2025 and 2029 – a scheme which has already seen showroom prices of some Ford Australia models rise.
The Ranger and Everest accounted for 88 per cent of Ford Australia’s sales in 2025, topping the sales charts in their respective categories.
“I’ll be talking to the government during the weekend; any government has to be very sensitive around CO2 guide path. We want to reduce our CO2 footprint, but there’s a level that the customer cannot afford,” said Mr Farley.
“Not all duty cycles can be electrified. There’s a lot of electric vehicles out there that just don’t make sense if you’re a heavy tower, and I see more tow hitches here than anywhere other than the Netherlands.
“That duty cycle of towing and pure electrification… right now, the technology doesn’t make that sensible – it has to be heavily subsidised by the OEM [vehicle manufacturer] to be compliant.”
Ford Australia introduced a plug-in hybrid (PHEV) version of the Ranger in 2025, while arch-rival Toyota will launch a battery-electric HiLux here but told CarExpert it expects it to sell in only small numbers.
Several Chinese brands have also entered the electrified ute segment, led by models including the BYD Shark 6 PHEV and GWM Cannon Alpha PHEV.
Electric vehicles accounted for a record 8.3 per cent of total vehicle sales in Australia in 2025, surpassing 100,000 registrations for the first time with 103,269 reaching local buyers. PHEVs are now growing at a more rapid rate, but only reached 53,484 new homes last year.
“In the last three or four years, globally, body-on-frame, medium pickup trucks are a global profit pool that every Chinese company is looking at, so we need our best and brightest,” said Mr Farley.
“The answer will come… but I’m very confident now. We have to work with the government because we have to be competitive on speed and cost.
“From my standpoint, those are the two policy issues this country has to face. You want to prioritise mining and extraction of raw materials – fine. But then you’re going to have to make some tough choices.
“Is the CO2 roadmap sustainable for customers? I think Australia is on the wrong side of that right now.”
The Ford chief’s comments come after major automakers engaged with US President Donald Trump ahead of his administration’s weakening of emissions laws in North America, prolonging the life of internal combustion engines.
MORE: Explore the Ford Ranger showroom