Tesla 'Seeing A Lot More Pressure' On Margins, Says Ford CEO

Ford Motor Co F CEO Jim Farley on Monday expressed confidence in matching up with Tesla Inc TSLA on EV returns.

What Happened: Tesla had a huge head start in the EV business similar to the one Ford had on Pro, Farley said. However, “now they're seeing a lot more pressure," Farley said in an interview with Bloomberg Television on Monday.

Responding to a question on whether catching up with Tesla involves Ford growing returns from its EV business or Tesla facing margin pressure, Farley said, “Both are going to happen.”

“They have reduced their prices on Model Y, their main product. Five-seven thousand dollars. It goes up, it goes down but it’s pretty far down,” Farley said. The CEO also drew a parallel between Warren Buffett-backed BYD and Tesla as the two companies faced with rising pressure from growing competitors in the EV market.

Why It Matters: Ford is eyeing an 8% return from its EV business by 2026. By the same year-end, it also aims to produce 2 million EVs.

For the full-year 2023, though Ford expects overall adjusted EBIT of about $9 billion to $11 billion, it is also eyeing a loss of about $3 billion for its EV unit Ford Model e.

Analysts are presently skeptical about the projected growth.

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