Ford's Jim Farley On Tesla: "No One Does EV Better"
In a recent internal meeting the CEO of Ford Motor Company (NYSE:F), Jim Farley, expressed his admiration of Elon Musk's company. He asserted that Tesla Inc (NASDAQ:TSLA) builds electric cars...
In a recent internal meeting the CEO of Ford Motor Company (NYSE:F), Jim Farley, expressed his admiration of Elon Musk’s company. He asserted that Tesla Inc (NASDAQ:TSLA) builds electric cars better than anyone, and that the legacy automaker needs to respect its rival.
In an employee meeting speech, Ford’s Jim Farley said: “If Ford was a trillion-dollar company, our stock would be worth about $250 a share. Think about the value creation of Tesla right now. And they have resources, smart people, the Model 3 is now the best-selling vehicle in Europe. Not electric. Flat out.”
“It was the best-selling vehicle in the U.K. Most months, it’s the best-selling vehicle in California. Not just electric, but overall. If we’re going to succeed, we can’t ignore this competition anymore,” he added.
The admiration comes at a time Ford is plotting a $5 billion repurchase in junk bonds to restore its credit rating, and after the company has pledged efforts and investments to a fully-electric future.
Although the American carmaker is “doing its thing” in the EV market, it is keeping an eye on Tesla’s products and business model, to set its own goals and capitalize on growing consumer adoption.
Tesla Keys Points
Farley identified three key aspects to Tesla’s success in furthering EV adoption, the first one being the latter’s direct-sale model: “Look at Tesla, why are they doing what they’re doing and what can we learn from them. First, they have a direct model… There’s no one in between. They make it so easy.”
“Three or four clicks configuring the vehicle with not a lot of complexity to delivering it to the customer. Simple, non-negotiated pricing. A large reservation system as well as remote service,” he said.
Later, Farley pointed to Tesla’s electric powertrain expertise: “Tesla maximizes use of electrons in the vehicle. No one does it better than they do. Their customers pay less for a better battery… And they manage every electron so they can be as efficient as possible with the expense of battery.”
Thirdly, the Ford CEO said: “The product itself is highly differentiated from the rest of the ICE field and complexity is tiny, compared to OEMs. That allows them to have enormous reuse. Reuse that we’ve never seen in our ICE business.”
Ford and Tesla are part of the Entrepreneur Index, which tracks 60 of the largest publicly traded companies managed by their founders or their founders’ families.