Ford Motor Co F CEO Jim Farley is the latest legacy-automaker executive to warn employees that electric-vehicle segment leader Tesla Inc TSLA needs to be taken seriously, Electrek reported on Monday, citing Detroit Free Press.
What Happened: Farley praised Tesla’s overall prowess in a recent internal meeting and said the Elon Musk-led company makes electric vehicles better than the rest and deserves that respect from the legacy player.
“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,” Farley said, adding that Tesla has the right resources, smart talent and successful products.
Farley noted that Tesla’s Model 3 electric sedan is the best-selling vehicle in Europe and the U.K. and it is also the best-selling vehicle in California most months.
“Not just electric, but overall. If we’re going to succeed, we can’t ignore this competition anymore.”
Farley went on to praise Tesla for three things that it had done differently and how the Dearborn, Detroit-based automaker could learn from it.
Direct Sale Model: Farley told employees that, unlike Ford, which sells cars through dealers, Tesla’s direct-sale model is easy and sans any complexity and definitely an advantage.
“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 deliver it to the customer. Simple, non-negotiated pricing. A large reservation system as well as remote service,” Farley said.
Powertrain Expertise And Aftersales: Farley told employees Tesla ensures “customers pay less for a better” and do more to make the customer experience better based on data coming off the vehicles.
Simplicity: As per Farley, Tesla products are simple and that's a huge differentiation compared to traditional, gas-powered vehicles.
“Tesla can scale quickly because of that complexity reduction. They can drive the cost down, which they have. They can keep processes simple.”
Why It Matters: Ford isn't the only automaker issuing warnings internally over the threat posed by Tewsla. Volkswagen CEO Herbert Diess last week warned workers that the Musk-led company's new German factory poses a major threat as the electric vehicle maker can build electric cars faster, as per a Bloomberg report.
Tesla has quickly clocked a $1 trillion market valuation, surpassing the combined market capitalizations of some of the biggest automakers in the world.
Ford, General Motors Co GM and Volkswagen Group VWAGY have begun picking up pace with their electrification plans and have set ambitious targets to outscore Tesla.
Price Action: Ford shares closed 4.46% higher at $20.15 a share on Monday.
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