Jim Farley, CEO of American automaker Ford, recently admitted that the company made a major strategic mistake in developing electric cars. In an interview, he stated that during the major changes in the auto industry, China rapidly took the lead in electric vehicles (EVs), while Ford’s focus remained focused on traditional combustion engines for a long time.
According to Farley, the COVID-19 pandemic and chip shortage temporarily obscured the true state of the automobile market. During that time, demand for vehicles was so high that almost every car could be sold at 30 to 40 percent more than its normal price. This resulted in record profits for companies, but it also sent the wrong signal that the market would remain the same for the long term.
A Major Mistake in Designing Electric Cars
Farley admitted that Ford launched electric cars, but they weren’t designed as electric vehicles from the ground up.
He said the company:
. Mustang Mach-E
. E-Transit
. F-150 Lightning
Introduced several electric models, such as the Ford Mustang Mach-E, and customers liked them. However, the problem was that these models were too expensive, preventing the company from generating the expected profits.
Ford CEO Shocked by Tesla Analysis
According to Farley, the real shock came when he, along with Ford’s electric vehicle chief, Doug Field, analyzed a Tesla model.
This comparison revealed that:
. The Ford Mustang Mach-E’s wiring harness
. was approximately 32 kilograms (70 pounds) heavier
. was approximately 1.6 kilometers longer
Whereas Tesla has designed its vehicles from the ground up to use the smallest and cheapest batteries, making the entire car lighter and more efficient. According to Farley, this difference is what gave Tesla the edge in electric vehicles.
China’s rapid progress also surprised
Farley said he was surprised by the rapid progress of electric cars in China. He said that companies there have rapidly developed new technology and low-cost EVs.
He questioned how China has progressed so quickly, while traditional automakers are still in the process of transformation.
Puma Gen-E Gets a Good Start in Europe
Ford recently launched its new electric compact SUV, the Puma Gen-E, in Europe. According to Farley, this model is selling well and has now become one of the best-selling electric cars in Britain.
However, he also acknowledged that the model’s potential in the US market is limited, as it may be considered small and relatively expensive there.
Future Strategy
Ford is now working towards bringing more innovation to electric vehicles. The company has strong hybrid technology, but Farley believes competition will be fierce in the future, especially as Chinese companies are rapidly gaining ground in the EV market.
He believes that all companies in the auto industry are currently undergoing a major transformation, and those that learn quickly will be successful in the future.
