May 22, 2023
Ford’s New Electric SUV Won’t Compete With Other Carmakers, CEO Says
(Bloomberg) -- Ford Motor Co., which is spending $50 billion building an electric-vehicle business, doesn’t fear the two EV-market leaders, Tesla Inc. and China’s BYD Co.
The automaker’s chief executive officer, Jim Farley, told analysts at Ford’s investor day Monday the company’s battery-powered models will be geared more toward buyers in vehicle segments Tesla and BYD don’t play in.
Farley pointed to a newly announced, three-row electric SUV Ford is developing as an example of how the companies’ vehicles are different.
“We don’t really see ourselves competing with Tesla and BYD in our second cycle of product,” the CEO said. “I don’t see how there’s a large-size, three-row crossover industry in their indigenous markets.”
Ford is going its own way to avoid creating EVs that could be “commoditized” by too much price competition, Farley said. Elon Musk’s Tesla has cut prices of its electric cars at least a half-dozen times this year as it seeks to retain dominance of the global EV market.
Read More: Ford Strikes Lithium Supply Deals With World’s Top Producers
Farley’s comments were made in response to Morgan Stanley analyst Adam Jonas, who expressed skepticism that Ford could achieve its goal of an 8% return, before interest and taxes, on its EV business by the end of 2026. Ford sees it EV unit losing $3 billion this year.
Taking on Tesla and BYD “is a pretty easy way to destroy billions and billions of capital over a three- or four-year period,” Jonas said.
Separately, General Motors Co. announced Monday it will introduce an electric version of the Cadillac Escalade, a large, three-row SUV, later this year. Farley also brushed aside concerns that model — and others from legacy rivals — poses direct competition to Ford’s new electric SUV.
“Our three-row crossover won’t look like other people’s,” Farley said later in a session with the media.
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