Photo: Jim Farley
Ford CEO Jim Farley spoke at the Alliance Bernstein Conference on Wednesday and said the company needs to revamp its century-long business model to compete in the electric vehicle marketplace.
According to Farley, in order for Ford to make enough profit on its EVs, it will need to consider cutting ad spending and also overhauling its dealership network, to compete with the likes of Tesla and others, reports Reuters.
The Ford CEO said the transition to electric cars is “the most exciting land grab in our industry since the Model T” was introduced by Henry Ford in 1908. He also said competition from China and EV startups means “the industry is heading to a huge price war.”
On Tesla, Farley said Elon Musk’s company has a huge cost advantage, convincing the legacy automaker to sell some cars directly to customers as well and also look into limiting or eliminating inventories of unsold cars at dealerships.
As Ford launches new EVs in the coming years, the company might have “multiple tiers of dealers” with some specialized.
“We have this opportunity to use our physical presence to outperform” new players including tech companies, said Farley. He added standards for dealerships in the future “are going to be brutal. They’re going to be very different than today.”
When it comes to advertising, the CEO said he was “not convinced” it needs to keep ad spending, which was at $3.1 billion in 2021; Tesla spends $0 on advertising.
Tesla doesn’t advertise, the others do. They are … hesitant to bite the hand that feeds them.
— Elon Musk (@elonmusk) May 31, 2022
“If you ever see Ford Motor Company doing a Super Bowl ad on our electric vehicle, sell the stock,” said Farley.
Ford recently delivered its F-150 Lightning truck to first customers in Michigan.
