Ford CEO says Tesla should be taken seriously as dominant player in electric vehicle market
The days when Tesla and Elon Musk were the butt of many traditional automotive jokes are long gone. The silly notion of an electric car turned out to be an idea that isn’t so silly after all. It’s ruthless and forward thinking. And mainstream automakers are still unprepared for this. Recently, Ford CEO Jim Farley held an internal meeting with some 20,000 Ford employees, and much of that meeting focused on competition from Ford, primarily Tesla.
The Detroit Free Press was able to get a copy of the video from the meeting, and according to her, Farley said Ford needs to take Tesla seriously as a dominant player in the electric vehicle market. He compared Ford to Tesla while using tables and charts.
The article noted that Farley also mentioned Volkswagen and Rivian. Farley’s main focus, however, was on Tesla. The article noted that Farley’s tone was rather serious when discussing Tesla and emphasizing that Tesla was operating from a position or point of strength, using tables, charts and comparisons. specific.
âIf Ford were a trillion dollar company, our stock would be worth about $ 250 a share. Think about Tesla’s value creation right now. And they have resources, smart people, the Model 3 is now the best-selling vehicle in Europe. Not electric. Flat. It was the best-selling vehicle in the UK. Most months, it is the best-selling vehicle in California. Not just electric, but globally. If we are to be successful, we can no longer ignore this competition, âsaid Farley.
âLook at Tesla, why are they doing what they are doing and what can we learn from them. First, they have a direct modelâ¦ There’s no one in between. They make it so easy. Three or four. clicks to configure the vehicle with little complexity to deliver it to the customer Simple, non-negotiated pricing A large reservation system as well as remote service.
âSecond, Tesla maximizes the use of electrons in the vehicle. No one does it better than them. Their customers pay less for a better battery. …
âThird, the product itself is very differentiated from the rest of the ICE field and the complexity is minimal compared to OEMs. “
That’s not all. The article notes that Farley pulled out a chart and said that Ford’s competitors are “unbelievable in that space, âand added that it’s something Ford has never seen before. Farley also mentioned that while Ford’s investment in electric vehicle startup Rivian is expected to pay off, Rivian is also a formidable competitor to Ford. He also spoke about Volkswagen and noted that it is the second largest producer of electric vehicles in the world, behind Tesla. (It’s actually the third, but who matters? Or, it’s the second if you count the plug-in hybrids.)
Will Ford remove the dealership model?
The dealership model is quite toxic to the auto industry. Before the advent of Tesla and its direct selling method, the only way to buy a car was through a dealership or directly from the car owner. As for the latter, I know people who have been scammed into buying used cars on Craigslist, but the former is very toxic.
When Farley referred to the âdirect model,â he was referring to the way Tesla sells its vehicles. And his willingness to learn from Tesla indicates he plans to change the way Ford vehicles are sold. He even admitted that there isn’t a whole lot of complexity, when the way Tesla sells and delivers vehicles to its customers is super simple. He noted that it has straightforward and clear prices and that there is no negotiation. Farley is certainly aware of the number of dealers who defraud their customers with markups and hidden fees. The question I have is what is he going to do about it? Will it follow Tesla’s lead and phase out dealerships?
Tesla leads the way #TSLA @you’re here @Elon Musk @ford
Ford’s CFO is asked if Ford will end up ignoring the dealership model, creating its own parts and batteries, in its “roadmap to an electric vehicle future.” pic.twitter.com/JagrCrVKK3
– Gail Alfar (Austin) (@GailAlfarATX) November 5, 2021
Era of change
We are living in an era of change. A change like this is something that is often written in the history books. I remember going to school and reading stories about historical figures and how some invented a machine that changed lives and changed industries. We are living in that kind of time right now and seeing the evolution of the automotive industry as a whole. Volkswagen and Ford are opening up and both have admitted Tesla is the leader here.
Not only do historic automakers give full attention to Tesla and its sustainability mission, they take note because they know their survival depends on it.
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