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Ford's CEO admires Tesla's profit margins or NIO's innovation, but vows to beat them both

The Mustang Mach-E (image: Ford)
The Mustang Mach-E (image: Ford)
Tesla makes at least US$10,000 per electric vehicle sold and this is the strategy that Ford's CEO Jim Farley wants to replicate while executing its own US$50 billion 2030 electrification plan. The other electric carmaker that Ford's CEO admires is NIO which currently beats Tesla at the specs-for-price game with the ET7 performance sedan and its semi-solid state battery option.

Recently, Ford vowed to invest up to US$20 billion more on top of its US$30 billion EV commitment by 2030 for initiatives ranging from solid-state battery development to reaching a production capacity of 600,000 electric vehicles next year. That's the largest investment in portfolio electrification by an America carmarker, as Ford wants to be the "true EV leader" in the U.S. In order to achieve this, however, Ford's CEO Jim Farley said during a webcast of the Wolfe Research conference that they will have to outrun two EV companies he admires - Tesla and its direct Chinese competitor NIO. 

Well, the companies that I think about that I admire because of their commitment — and frankly, the hard work they did to earn their reputation — are companies like NIO and Tesla. They've been at this a long time. They engineer their vehicles differently. I'm most respectful of Tesla's profitability. They're now making more than $10,000 a vehicle in their second quarter earnings... To get the margins that we see at a company like Tesla, we need to have real experts that can drive that scale.

Ford's market success with the Mustang Mach-E which is now the second most popular electric SUV in the U.S. after the Tesla Model Y, tips that the carmaker has a potential to realize that vision. Its iconic F-150 pickup truck has also been reincarnated into a fully electric Lightning model which proved so popular that Ford had to equip dealers with tools to prevent scalping like a contract ban over resales in the first year of ownership. It's not hard to fathom why Ford admires Tesla's pricing strategy, too, as the world's most popular EV maker recently disclosed that its average car costs US$36,000 to make while the cheapest Model 3 it sells goes for US$45,000. Tesla, much like Apple, sells products done on a single platform in millions and charges a brand premium for them which seems to be the successful market strategy for any company that has reached an iconic brand status.

The more interesting company of the two that Ford's CEO vows to beat, however, is NIO. It already has performance sedans like the ET7 which beat Tesla's specs for the price, while later this year it is readying a release of a model with semi-solid battery that will allow it to hit the 626+ miles (1000km+) range on a charge threshold. NIO developed this pack despite that its solid-state battery ambitions were shot down by the world's largest battery maker CATL, while it also offers innovations like EV battery swap stations to solve the dreaded range anxiety. It's therefore not by accident that Ford is eyeing Tesla and NIO as the EV companies to aspire to, and it will be interesting to follow how its US$50 billion electrification strategy panned out a few years down the road.

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> Expert Reviews and News on Laptops, Smartphones and Tech Innovations > News > News Archive > Newsarchive 2022 02 > Ford's CEO admires Tesla's profit margins or NIO's innovation, but vows to beat them both
Daniel Zlatev, 2022-02-26 (Update: 2022-05- 7)