Ford Must Copy Tesla To Succeed
For must copy Tesla in order to succeed as a company and to make electric vehicles at scale.
For has just said that making EVs takes 40% less labor. This, unfortunately, means that less staff will be required to make Ford's EVs. Hopefully those people can find other roles in technology, batteries, and other areas.
Ford has also said that vertical integration is also the key to making EVs and to make them at a profit. One thing we know about Tesla is that they are heavily vertically integrated. If any other legacy auto makers were making EVs at a profit (besides Porsche), we would be hearing about it. But we are not hearing about it.
The future is vertical integration and this is something that isn't easy. Ford just disclosed the fact that they need new supply chains and new factories. The biggest part of Jim Farley's plan is to build 2 million vehicles by the end of 2026. This will include the F150 all-electric pickup truck. This will require around $50 billion.
Ford and GM have their work cut out for them and it is going to take a lot of construction, time, automation, and money in order to be ready to compete in the EV space.
Future of EVs
Vertical integration is one of the key pieces needed. Jim Farley has also said that EVs have about 40% fewer parts than an internal combustion engine vehicle. You will save money making an EV and owning one over time.
This is the 2nd inning of a 9 inning game, according to Jim Farley. I'd say that the innings started in about 2010. This is when BYD and Tesla got started. I think we are closer to the 4th inning of the game and by the time 2030 rolls around, we will be in the 8th inning of the game.
Ford is reverting back to its business model from 100 years ago. Ford has outsourced a lot of its internal combustion engine work. Ford is going to go back to its roots. Ford also welcomes a union of workers in its plants in the United States.
2030 seems to be the magic year for EVs. Any auto makers who have not made the transition to electric vehicles by then will likely be bankrupt. Ford wants to be #1 in EVs and doesn't like being second to Tesla.
If Ford produces 2 million cars in 2026, that is good, but it should be higher than this. In 2026, Tesla will most likely be making around 5 to 6 million vehicles, 2 to 3 times more than Ford. For Ford to get to 2 million vehicles though, it's going to be tough. It will take Tesla until the end of this year to hit a 2 million run rate and Tesla has been making EVs since 2010.
It'll be interesting to see if Ford can do it. What do you think about Ford copying Tesla? Will they succeed in the EV transition?
For more information, see this video from The Electric Viking:
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Jeremy Johnson is a Tesla investor and supporter. He first invested in Tesla in 2017 after years of following Elon Musk and admiring his work ethic and intelligence. Since then, he's become a Tesla bull, covering anything about Tesla he can find, while also dabbling in other electric vehicle companies. Jeremy covers Tesla developments at Torque News. You can follow him on Twitter or LinkedIn to stay in touch and follow his Tesla news coverage on Torque News.