Ford is in the midst of a major electrification shift as the automaker invests $50 billion with a goal of producing two million EVs annually by 2026. However, it isn’t alone in that mission, as several other companies are also doing precisely the same thing, though each shares a common goal – taking market share from Tesla, which has dominated this space for years now. Over the past few months, we’ve seen this battle intensify in terms of pricing, which – according to Jim Farley – reminds him of a very different time in automotive history.
“Yeah so we’re back to 1913,” Farley said while speaking during the recent Wall Street Journal Future Of Everything Festival. “So Henry Ford did this, he started 810 dollars for the Model T and when he was done I think it was 400 bucks. He was convinced that if you can use your manufacturing scale, even if someone had a fresher product or better product, he could lower the cost so much that more people would adopt a new technology. Or he could make money from other things. It turns out that he just commoditized his product and we almost went bankrupt, this company. Like not a good move.”
This certainly isn’t the first time Jim Farley has criticized Tesla’s decision to drop prices multiple times over the past few months, which he previously called a “worrying trend” while noting that “you do not want to commoditize the product.” On the same token, The Blue Oval is working to reduce the costs of EVs and make them more affordable, most recently slashing Ford Mustang Mach-E prices and switching to a less expensive lithium-iron phosphate battery pack in standard range models.
Regardless, an EV price war is threatening to impede Ford’s progress toward making its all-electric vehicles profitable, which is expected to happen with the launch of its second-generation models in the next couple of years. Meanwhile, Farley also recently both praised and panned Tesla for its ability to move quickly and its refusal to update its vehicles more frequently, while also pointing out that demand for the automaker’s vehicles is beginning to wane as well.
We’ll have more on Ford’s EV strategy soon, so be sure and subscribe to Ford Authority for 24/7 Ford news coverage.
Comments
So now Farley thinks he knows more than Henry Ford. A massive recession in 1920-1921 and heavy debt almost caused a bankruptcy. However it did not happen and the price reduction actually helped to move more cars. Before this the assembly line workers could not afford the cars they were building.
I Salem and they suck
Tesla has much more efficient engineering, no legacy liabilities, sold carbon credits out the wazoo, and has been remarkably able to offer a now stale product without a refresh. Their bottom line is the bottom line…copious amounts of cash. Tesla will now leverage their cash advantage to cut their prices to drive their competition out of business. To use Farley’s example, tremendous consolidation happened in the automotive industry in the early 20th century. That is about to happen with EVs which will leave Tesla standing and Ford and GM with hard decisions regarding what they will do with money losing EVs. Their decisions will be even tougher as the ICE divisions get squeezed. Will they keep supporting a money losing product now that Uncle Sugar Daddy has run out of free money to give them?
Jim, your a Peka head! Your going to put Ford out of business! No one wants these EVs! I will never buy an EV! My local F dealer has three F150 lightnings and can’t sell them, I think you have been talking to Joe Biden an awful lot!
Don’t forget about your battery replacement cost when it goes bad over time I guess it will be cheaper to buy a new car lol not for me
I absolutely love my Ford Lightning. Have had no problems with it, it’s beautiful and solid, fun to drive. Worth every penny.
God bless you with your 150 but what is the resale value of your used ev with a bad battery sooner or later you will need one and when you do it will be very expensive
Ford is not investing. They are being bribed by the current administration. How many Ford customers actually want an electric vehicle? How many can even afford it? Grow a pair Ford and do what works, not what the hapless government pays you to do.
They’re not being bribed, they’re part of the problem. They’re lobbying for the higher rebates and forcing these things on us. It sickening. It’s making my blue blood want to change colors.
The buggy whip industry will never die folks are out in force.
Big difference. Buggy whips went out of business by consumer choice, not government force.
I didn’t know the buggy whip industry was as prominent as the auto industry. How many hundreds of thousands of people did tge buggy whip industry employ?
That likely was meant in a collective sense. The makers of actual buggy whips that moved on to auto upholstery survived. The makers of wagons that went on to cars survived, Studebaker being a case in point. (More in a moment.)
Companies that evolve with the times or move into new ventures, survive. Those who stick to the old ways die off.
When was the last time American Express forwarded freight? When was the last time Western Union sent a telegram, or offered some form of telex/TWX service? When did General Motors roll out their last locomotive? All are still with us.
I mentioned Studebaker. It was a remarkably well-run company. They got out of wagons and carriages and moved to cars and eventually trucks. As demand for their trucks faded due to a winnowing out in the marketplace, they stopped making trucks. They built good automobiles with many innovations, but soon, demand for their cars was so low, they stopped making them. Did Stoodie go out of business? No. In addition to royalties on some of their patents, they had about 35 other divisions and subsidiaries that were highly successful. They went on for many years after that last Lark came down the line.
Tesla would’ve been bankrupt several times already if it wasn’t for fanboys jacking up the stock price Farley is right that Tesla lowering their price will hurt them all but so will not selling those appliances at the current jacked up prices. Hopefully they’ll stop making us pay for a big chunk of rich peoples appliances. If those bs rebates go away, they’ll be hard pressed to sell them to anyone outside the top few percent of income earners. Farley is starting to panic over his decision to focus on these appliances instead of cars more people can afford. You need people in apts and condos to buy these also and most of them won’t have chargers at home. An expensive condo might be able to asses the owners and put chargers in but it will be expensive. Not just installing chargers but also upgrading the transformer on their street, if that’s possible. So much pie in the sky garbage
Automotive news articles this month are talking about how Americans simply aren’t buying EVs, and that it has nothing to do with supply. Americans simply don’t want EVs. Farley has completely destroyed a once great company.
Virtually every company has a finite life, regardless of their success. Some step on their own feet to the point they go under. Others keep trying to sell a product no one wants anymore. I recall an article in Newsweek decades ago about a maker of gaskets and O rings. He refused parking to employees with foreign cars, and refused to make anything that was metric spec. This is ‘Murikah bah gawd! He even refused to do it long after The Big Three started their switchover. He went out of business clinging to the tradition in his mind.
Ford and GM will both eventually be the next AMC. The products offered will not interest the public, and they will either go under and be gone, or, like Chrysler absorbed AMC, and then itself was absorbed into a consortium, unless a division performs at a profit it will be gone.
I’m no fan of anyone who worships with Klaus Schwab. Time for major changes @ Ford before they put millions out of work and the evs prove they are not the answer.
I was very interested in an F-150 Lightning Lariat when they first came out at 60,000. Prices are out of control now. Everything especially ev’s are jacked up 10 Grand every few months. It’s crazy and ridiculous. Used prices are especially outrageous. 2022 Ford maverick new 20,000. That’s why they’re so popular. Try to get a 2022 maverick now it’ll run you 35,000 used! That’s stupid ridiculous. As for Tesla, it’s called competition!!! Very good for consumers!!! Keeps prices down for consumers. Apparently we need a lot more of it. If you don’t want to go bankrupt then cut costs and prices. Be the competition. Make everyone else compete with you. Don’t try to make a fortune off every unit. Make a little off a million units. Like Henry did.
Remember when tractors were invented. Every one was convinced they will NEVER replace horses. We still have horses but very few of them work farms in the western world.
I see MANY complaints on here about how this or that Ford vehicle has been on order for over a year. I am sure some of the comments are nonsense, but for the true ones, I marvel at your patience and brand loyalty.
What Farley needs to do is concentrate on what can actually be built and delivered in quantity. An electric pickup is at best a curiosity and not yet ready to do real work. It is a vanity item, as are many pickups. In other vehicles, just stop offering vans you can’t deliver. That sort of thing.
I look at the management at both Ford and GM and marvel at the absolute stupidity on display.
The last thing anyone needs to do is follow Tesla’s example. Telsa makes and always have made poorly built gimmick machines. Their success is entirely in marketing to idiots and clout chasers. What Ford needs to do is actually build a vehicle that isnt a cheap piece of absolute trash. How about instead of investing billions to make inferior vehicles, they invest like 50k in guy named Dave to do a minute of quality control at their factories? Maybe build something that will last instead of cheap plastic trash that starts breaking immediately. They cant even build a seat anymore that wont lead to chronic fissures. (we have new fords at work, and they are truly that uncomfortable and cause genuine damage.). Maybe stop insulting their own legacy and history. Back in the 70’s, when gas prices were losing control, they brought in the Ford Maverick, a beautiful little car made for families to be able to get by with. Simple and affordable, with some nice features as well,. Today they take a ford escape, tear the back off of it, then claim its a “truck” and overprice that constantly breaking down junk while giving it the “Maverick” badge. Its disgusting. We’ve reached the point where an old Dodge is preferable to a new ford, and even typing that comment makes me want to retch.