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.
Closing the week at $11.32 per share.
Get $1,000 cash back on the off-road oriented SUV.
A potentially life-saving idea.
A very nice example of the large and luxurious ride.
A far more profitable venture at the moment.
He looks a little startled.
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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.
The buggy whip industry will never die folks are out in force.
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.