Yahoo Finance's Pras Subramanian joins the Live show to discuss Ford selling its Explorer SUVs without certain semiconductor chips amid the chip shortage.

Video Transcript

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BRIAN SOZZI: Ford has opted to ship Explorer SUVs missing semiconductors. "Yahoo Finance" Senior Auto correspondent, Pras Subramanian, has more on this. So Pras, where are these chips missing? If I were to go out there and buy an Explorer today, do I get heated seats? Do I get a massage function? You know I love the massage functions in my cars. Love them.

PRAS SUBRAMANIAN: You know, Sozz, I think you'll be able to have that massage function, but the Sozzi Juniors in the back seat may not have the ability to adjust their hair their AC because Ford is not shipping those chips that use the components in the back that actually allow you to change the HVAC controls in them, because they want to save those chips for other parts of the car.

So it's an interesting and maybe even innovative move here to kind of get cars that are partially built drivable to dealers and get them sold now. Ford in a statement said, quote, "beginning soon, we will offer customers a way to get their Explorer more quickly, too, thanks to a specification change that will keep rear seat heating and air conditioning auxiliary controls up front with the driver."

So the driver will be able to adjust those rear seat controls, not the actual passengers back there. These will come to dealers now. Ford said they'll ship the retrofits to the dealers in a year. Customers will get an actual discount for those cars and they'll get within the year, they'll get that functionality restored with new chips.

Now, you know, in the past, Ford has created partially built undrivable cars and left them on the factory lots waiting for them to be shipped out. Famously, we saw a bunch of Broncos sitting on a factory floor with no ability to be driven yet. We also saw Ford kind of stopping and starting the F-150 production for over the last year and a 1/2 now because of component shortages.

And right now they are actually offering to sell the F-150 without auto stop/start tech that can be kind of annoying when you drive around. But they're not going to include that for now and then they'll actually retrofit it later.

But isn't one of the things that Ford is trying to do, just get those cars off the factory lots and get sold because Sozzi, just earlier today, the automotive news is reporting that Ford is telling dealers that it's seeing about 1.66 million vehicles sold next year. That's down from 1.9 million that they had forecast because of all these component chip shortages.

JARED BLIKRE: And Pras, you know, I was listening to an interview with, I believe it was, the CEO of Ford, Farley, about the spin-off potential here. Really separating its business from the traditional ICE motor and the EV business, and even talking about retooling the sales process, which sounds to me like locking out some of the dealers. I'm just wondering, is there any chatter in the auto community about this huge strategic step that could be unfolding?

PRAS SUBRAMANIAN: You know, Jared, it was a big move, well-received by the market to kind of split the company into two. You have kind of like the new co EV and the old co ICE business, the internal-combustion business, using that old co to sort of fund that new co.

Well received by the market, but you have to ask, in terms of reality, does Ford have the ability to create something like, they want to create three million EVs next year. They can't even build the Explorers with the actual rear seat HVAC controls, right? So that's a reality that they have to face.

From a dealer point of view, dealers have been marking up cars tremendously. The Broncos that are there, they've been marking them up, even F-150s. And Farley warned dealers, we're watching you, don't do that because bad customer experience. You know, famously Tesla, and Rivian, and Lucid, who actually they own their dealerships, they don't ever charge market because they actually own them. So these realities are kind of coming to a head here when you have sort of competing forces with, let's change the business, but then also dealers wanting to actually make more money than they can actually in the market that they have a commanding position in.

BRIAN SOZZI: Pras, all morning long we're sharing stories of our first car. I think Jared, if I have it right, was a Honda, small Honda. He had two subs in his trunk. Me with the '87 Monte Carlo, two subs and the amp in the back. What did you drive, my man?

PRAS SUBRAMANIAN: [CHUCKLES]

So my dad, his first nice car was an '84 Cadillac Seville. He loved that thing. He loved Cadillac. And then he gave me that car when I turned 16. At that point, it was kind of old, kind of clunky, but it was a Cadillac. Man, it was like driving a couch, right? I had a huge like velvet-like front bench seat. My friends loved that car. I did too. It was a lot of fun, but it was huge.

BRIAN SOZZI: And now look at us. Look at us three, Pras and Jared. We are true titans of industry. We have, in fact, made it. "Yahoo Finance" Senior Auto correspondent, Pras Subramanian, good to see you.